2. Temporal Sharing of Land
2.1. Estates in Land
A TAXONOMY OF PRESENT AND FUTURE INTERESTS
We have already discussed a few situations in which property is transferred from one party to another. What used to belong to O now, after the transaction, belongs to A. We now consider land transactions in which O desires to grant property to A but, perhaps, not forever. Maybe O wants A to have the property for awhile before turning it over to B. Perhaps O wants A to have the property, maybe even forever, but if certain events occur the property should go to B.
The law permits O to grant property with conditions and time limits. As we will see, and later consider more deeply, it restricts such arrangements to a small number of types. Our immediate task is to determine from the language of a grant which type of arrangement we have. Think of it as learning to identify animals in a park. There may be only a few different animals, and our task is to distinguish one from the other based on identifying characteristics. So too here. Grantors can and do use a wide variety of language and may specify all sorts of temporal relationships, but the law requires us to reduce this language, to map it onto, the small set of permissible relationships.
A warning: some property courses delve deeply into various accounts of the medieval history of these arrangements. This is not such a course. Nor will we be concerned with being able to unravel the most complex of temporal divisions or the most obscure doctrines. Our goal is only to gain familiarity with the basics of the common law system of estates in land, being able to identify the elements of traditional grants and to understand typical disputes that arise from such grants.
First things first: The grants that we will consider look more or less like the following
O to A [condition] then to B.
What this grant by O does is to give the property to A for awhile and then, maybe, to B. A has the present interest. B holds what is called the future interest. Makes sense: at the time of the grant, A has the property now, and B will take the property, if at all, later. So this grant creates a present interest and a future interest. This is what I meant above by “types of relationship.” What present interest and what future interests are created by the grant? That’s the initial question we will be trying to answer when we read a grant.
Distinguishing fee simple interests from everything else
We now ask several questions, each with two answers. Answering this series of questions will tell use precisely what present and future interests we have. Let’s take these questions one by one, and we’ll return to them to summarize.
Question 1: Is the present interest possibly infinite or definitely finite in duration?
That is, might A retain the property, under the grant, forever, or is A guaranteed not to retain the property forever under the grant? Now, of course A won’t really live on the property for all time, but the question here is whether the grant will definitely cut off A’s ownership, and thus that of anyone who has taken from A by will or grant, involuntarily.
If the present interest is possibly infinite in duration, we call it a fee simple. If the present interest is definitely finite, it is either a life estate or leasehold. This distinction is typically, though not always, easy to discern in a grant. A life estate will almost always state that A’s interest is only “for life,” and a leasehold will almost always set out a fixed time limit. By contrast, a fee simple will not be so limited. Traditionally, a fee simple would be created by language such as
O to A and his heirs [with perhaps some conditions here].
The “and his heirs” part is meant to indicate that A’s interest should not expire and revert to O or go to some other party on A’s death. These days, however, using such language or explicitly stating that the grant is “in fee simple” is unnecessary. Courts will presume a fee simple in the absence of clear language otherwise.
Distinguishing types of fee simple interests and their corresponding future interests
We will ask three questions to distinguish the three types of defeasible fees.
Question 2: Is the present interest definitely infinite or is it possibly finite?
If there is no condition in the grant that could cause A to lose the property to someone else, then A has a fee simple absolute. There is obviously no future interest following a fee simple absolute, since nothing in the grant could lead to someone else becoming the owner. A fee simple absolute is created by simple language
O to A.
You could get fancy and write something like: O to A and his heirs; or O to A in fee simple absolute. But this isn’t necessary. The law has a strong presumption in favor of interpreting language to grant the biggest present interest possible, and there isn’t anything bigger than the fee simple absolute. If we find a fee simple absolute we’re done.
If, on the other hand, the grant contains a condition that could cause A to lose the property to someone else, then we say that A has a defeasible fee (which I like to think of as a fee that can be “de-feed”). The “someone else” who could get the property has a future interest. Because A has a fee, though, this other person’s future interest may never become possessory. At the time of the grant, we just don’t know what’s going to happen. There are three kinds of defeasible fees, each with a corresponding future interest. They are: (1) the fee simple subject to an executory interest (the “someone else” has, surprise, an executory interest), (2) the fee simple determinable (the “someone else” has a possibility of reverter), and (3) the fee simple subject to a condition subsequent (the “someone else” has a right of entry). Those are all the types of defeasible fees and their corresponding future interests. Now let’s figure out how to tell them apart.
Question 3: Is the future interest in the grantor, O, or someone else?
If it’s in someone else, we’re pretty much done. Such a grant would look like
O to A, but if something happens, then to B.
Here A has a defeasible fee so long as it’s uncertain whether this something will ever happen. But if that thing does happen, then the grant specified that B should get the property. In other words, the future interest is in B. B is not the grantor.
In this case, we say that A has a fee simple subject to an executory interest and that B has an executory interest. In particular, we may say that B has a shifting executory interest, because the happening of the condition will shift ownership from one person who is not the grantor to another person who is not the grantor.
If the future interest is in the grantor, then we have a further question to ask in order to name the interests. Note that unless the grant mentions a third party, we assume the future interest is in the grantor. We’ll look at some sample language below.
Question 4: Where the future interest is in the grantor, will the happening of the condition vest ownership in the grantor automatically or only if the grantor asserts his or her right to retake the property?
If it’s automatic, we have a fee simple determinable in A and a possibility of reverter in O. Courts differ on whether this alternative is presumed. But a guaranteed way to specify that reversion to the grantor should be automatic is to use what is often called “durational language.” For example,
O to A so long as the property is only used for residential purposes.
O to A until alcohol is consumed on the premises.
“So long as,” “while,” “until,” and the like are key words that all courts will interpret as an intent to specify an automatic reversion to O and thus an intent to create a fee simple determinable / possibility of reverter.
If the reversion is not automatic, we call the present interest a fee simple subject to a condition subsequent and the future interest a right of entry. Some courts will insist on something approaching an explicit reference to a “right of entry” or “right to enter and retake.” Some look for a non-durational formulation of the condition – “but if” or “upon condition that.” And still others will presume that reversion is not automatic unless it’s absolutely clear the grantor intended otherwise. The following will surely create a FSSC / Right of Entry:
O to A, but if alcohol is ever served on the property, then I shall have a right of entry.
Note that this distinction does not arise with executory interests. For whatever reason, if the future interest is in someone other then O, the property transfers automatically on the happening of the condition.
It may take awhile to explain and to read through this initially, but distinguishing fee interests is not very difficult. We ask four questions:
- Potentially infinite? Yes = fee simple (FS). No = something else.
- If potentially infinite, is it possibly finite? Yes = defeasible fee. No = FS absolute (done).
- If defeasible fee simple, future interest in someone other than the grantor? Yes = FS subject to executory interest / executory interest (done). No = go to question 4.
- If in the grantor, forfeiture automatic? Yes = FSD / POR (done). No = FSSCS / ROE (done).
If you are a chart person, you may want to refer to (or make) a flow chart from this. The only trick, once you have this down, is figuring out from the language of the grant what the answers to these questions are. That’s done through a variety of presumptions and interpretive techniques, some of which we will see in the cases that follow.
* * *
That’s it for fee interests. You now know enough so that, with a little practice and after resolving any ambiguities in the language a grantor chose, you will be able to name the fee interest contained in a grant. Now, to return to our metaphor at the beginning of this section, you can name at least some of the animals you run across in the park. However, unlike the inherent joy some take in identifying the denizens of the natural world, no sensible person would delight in distinguishing one type of land grant from another unless tangible consequences flowed from the distinction. Indeed, the law does treat these types differently. Indeed the law does treat these interests somewhat differently.
For example, what happens if a condition in a defeasible fee is violated but the present interest holder stays on? Suppose the grant was to A so long as alcohol is never sold on the property, but, wouldn’t you know it, A sold alcohol on the property. The grant described is a fee simple determinable with possibility of reverter in the grantor. We know that the grantor becomes the owner of the property immediately upon the violation of the condition. If A continues to occupy the property after the violation, he or she is a trespasser. And if one trespasses in the right way, for long enough, one can take property by adverse possession. So if A sells alcohol and then continues on as the apparent owner of the property for the statutory period, A will indeed become the owner again, by adverse possession, and, this time, free of the condition.
Contrast this with what happens if the grant were toA but if alcohol is ever sold on the property then the grantor has a right of entry. Now if A sells alcohol on the property, the grantor does not immediately become the owner of the property. Rather, the grantor has the right to retake the property. But until the grantor reclaims the property, A continues to be the rightful owner and is not a trespasser. Therefore, the adverse possession period does not start immediately on the violation of the condition. Paradoxically, this could be worse for A, since a lengthy period of violation won’t necessarily serve to free A of the condition: grantor may return and retake at any time.
This distinction isn’t as stark as it appears. In fact, the equitable doctrine of laches or a statute may prevent the grantor from showing up to retake too long after a violation of the condition. As is often the case with these somewhat ancient forms, what looks formally like it might make a difference may not make much of a practical one.
Life estates and remainder interests
We now take up grants that create present interests that will definitely terminate. Some specify durations of fixed periods. These would be leaseholds, which in many places are not considered interests in land at all but only a type of contractual arrangement regarding possession. We will consider leaseholds later. For now we focus on a particular kind of definitely finite present interest: the life estate. These look like:
O to A for life, [then possibly to someone else].
Unfortunately for all of us, it is certain that the condition of A’s ownership, that he or she be alive, will one day no longer be satisfied. Thus, we know this cannot be a kind of fee simple interest. Indeed, we call all such interests life estates. Because everyone will one day die, all life estates have corresponding future interests. It is these future interests we must distinguish. To do so, we ask another series of questions.
Question 1: Is the future interest, the one following the life estate, in the grantor or someone else?
If it’s in the grantor, then we call the future interest a reversion. The simplest example:
O to A for life.
A is the present interest holder. He or she has a life estate. When A dies, what happens? If nothing else is said, the property reverts to O. O, the grantor, has a reversion.
If, on the other hand, the future interest is in someone else, we call the interest a remainder. A remainder is the name of the interest in a third party that immediately follows a life estate. There can be no gap. An example:
O to A for life, then to B.
Here, A has a life estate. B has a remainder interest, and O has nothing. By the way, one who has a remainder interest is sometimes called a remainderman, a word that strikes me as even more ridiculous than “tortfeasor.”
Question 2: Is there any uncertainty in who, exactly, has the remainder interest or in whether conditions on the remainder interest will be met?
If an identifiable person or group of people is certain to take the property on expiration of the life estate, then their future interest is called an absolutely vested remainder or, synonymously, indefeasibly vested remainder. The example of a remainder interest above is the quintessential absolutely vested remainder. B is an identified person, and there are no conditions on B’s taking the property.
Contrast this with the following:
O to A, then to A’s oldest living child.
O to A, then to B if B graduates from college.
O to A, then to O’s grandchildren.
In each of these grants, A has the present interest, a life estate. Each also specifies that a third party, meaning someone other than the grantor, should take when A dies. Thus, each creates a kind of remainder interest. But in each we either do not know who will take when A dies or do not know whether the specified remaindermen will take when A dies. We don’t have an absolutely vested remainder in any of these grants. So what do we have?
There are three other types of remainder, and the last part of our job in this section will be to distinguish these three types. (1) The contingent remainder; (2) the vested remainder subject to divestment; (3) the vested remainder subject to open.
Question 3: If the remainder interest is in an uncertain person or class of people, is at least one member of that class identified and certain to take?
If so, then we have a vested remainder subject to open. That identified person is guaranteed to take at least a share of the property. Others may later join the class of remaindermen, and so we cannot say that we know with certainty exactly what the identified person will take until this class closes. An example may help:
O to A for life, then to B’s children. Suppose that B has at least one child, C, at the time of the grant.
Let’s start with the easy part. A has a life estate, the present interest created by this grant. Who has the future interest? Certainly C will be entitled to take the property when A dies. But others might as well. If B is dead at the time of the grant, then we know with certainty who all of B’s children are.1 And so this grant uses the phrase B’s children to refer to an identified group of individuals – not a class that could expand in the future. And so the children would have an absolutely vested remainder.
If B is alive at the time of the grant, then he or she might well have more children after the grant.2 And so C’s share of the property will diminish as more children are born. We know C will get something, but we don’t exactly know what. C has a vested remainder subject to open, sometimes called a vested remainder subject to partial defeasance, a phrase reflecting the fact that C’s share of the property will diminish if new individuals join the class.
At some point, though, this has to stop. C needs to know what portion of the property C has. In general, we try to determine when the grantor intended the class to close, meaning when no new individuals, even if they satisfy the condition, should be able to share in the grant. Often grantors may not specify this time, and so there are two common ways that classes close.
- Naturally: There may come a point at which it’s no longer physically possible for there to be new class members. For example, if the remainder is in B’s children, the class closes, at the latest, when B dies.
- The Rule of Convenience: We close the class, unless grantor’s intent is to the contrary, when a member of the class is entitled to demand possession. This typically happens when the life tenant dies. And so, using our example, where the remainder is in B’s children, when the the life tenant dies, C and any other living children of B will be entitled to take possession, and the class will close. If B has children at some later time, those children will not be entitled to a share of the property.
All of the above went to defining the vested remainder subject to open, the remainder interest we would find if we answer this question: Yes. If, on the other hand, we answer negatively, that there is no one at the time of the grant who is certain to take the property upon the death of the life tenant, then the grant to this unascertained person or group of people is called a contingent remainder. We just don’t know who, if anyone, will take the property upon the death of the life tenant. An example:
O to A for life, then to A’s children. Assume A has no children at the time of the grant.
In this example, A has a life estate, and the class of A’s children has a contingent remainder. This is because while we know how to determine whether someone is in that class, there is no one in that class now, and there may never be.
Question 4: If the remainder interest contains a condition on the remainderman’s taking the property, did the grantor intend that the remainderman had to satisfy the condition before having a vested interest or that the remainderman’s vested interest could be taken away if the condition is satisfied?
This is, conceptually, the toughest distinction of the lot. And frankly it often makes little sense. Luckily there’s an easy way to distinguish a vested remainder subject to divestment from a contingent remainder. So let’s rephrase the question to make it easier to answer, though perhaps less substantive:
Question 4: Is the condition part of the clause granting the remainder, or is the condition separated from the remainder grant by a comma and words like “but if”?
Ok, so this “comma rule” won’t prevail if there is contrary grantor intent, but it resolves almost all of the cases. Examples are the only way to understand this:
O to A for life, then to B if B graduates from law school.
Here, we have a contingent remainder, because “if B graduates from law school” is part of the “then to B” clause, and is not separated by a comma. We don’t know if B will ever graduate from law school, even though we do know who B is. Contrast this with:
O to A for life, then to B, but if B does not graduate from law school, then back to O.
Same effect, but different name. Because the condition is separated by a comma from the “then to B” clause, most courts would interpret this remainder interest in B to be a vested remainder subject to divestment.
Formally this distinction turns on whether the condition is precedent to the remainderman’s ownership, i.e. the condition must be satisfied before we can say that the remainderman has anything at all. Or whether the remainderman has been granted something that subsequently may be taken away, perhaps even after the remainderman has taken possession, if the condition is violated. But practically, it can be difficult to determine which of these grantor meant, and in many cases it doesn’t matter.
Importantly, though, the rule against perpetuities, which is a rule that can invalidate grants that remain uncertain too far into the future, applies to contingent remainders but not to vested remainders subject to divestment. So the classification of these very similar types of remainders can have dramatic consequences.
Distinguishing remainder interests is a little more involved than distinguishing fees and their future interests. But a little practice makes it easy. If we have a life estate, we’re going to ask what kind of future interest is created. We ask the following questions to decide:
- Future interest in grantor? Yes = reversion (done). No = remainder.
- Uncertain condition and/or unascertained remaindermen? Yes = go to next question. No = absolutely vested remiander (done).
- If unascertained remaindermen, is there at least one who is certain to take? Yes = vested remainder subject to open (done). No = contingent remainder and reversion in O (done).
- If condition, separated by comma? Yes = vested remainder subject to divestment (done). No = contingent remainder and reversion in O (done).
There it is – not as hard as all the above explanation may have seemed.
A few more notes on remainders
First, let’s clean up one loose end by classifying all of the interests in the following grant:
O to A for life, then to the first child of A to graduate from law school. Assume A has no children at the time of the grant.
Aside from setting up an unhealthy intra-family dynamic, this is a grant of a life estate to A. Immediately on A’s death the child, if any, of A that has satisfied the condition will take the property. Thus, there is a remainder interest here. But we don’t know who this child might be and whether any child will exist or satisfy the condition. This is a contingent remainder.
What happens if A dies, but no child of A has graduated from law school? The answer is that the property reverts to O. In fact, any contingent remainder also creates a reversion in O. So to classify fully the interests created, we’d say that A has a life estate, that there is a contingent remainder in one who might satisfy the condition, and that O has a reversion.
Second, remainders, like all future interests can be limited in time themselves. It’s best not to think about this until you have the hang of the classifications above. But once you do, this possibility isn’t really more complex. The upshot is that grants like this one are fine:
O to A for life, then to B for life, then to C.
All of the examples we have discussed so far have involved future interests that will become fee simple interests – and in fact fee simple absolute interests – once they become possessory. In this grant, A has a life estate, the present interest, B has an absolutely vested remainder for life, and C has an absolutely vested remainder (in fee simple). Similarly, life estates can be terminated early like fees. So we could have a life estate determinable, for example.
Third, contingent remainders can be granted in the alternative. Here’s an example:
O to A for life, then to B if B survives C, otherwise to C.
B and C have alternative contingent remainders. It’s easy to see that each has a contingent remainder, since each must satisfy a condition in order to take. It certainly seems as though there is no way that one or the other will not succeed A in ownership. Still, though, we would say O has a reversion, because there is no vested remainder specified in the grant.
This example brings up a fourth note. It used to be that if a contingent remainder did not vest, i.e. the condition was not satisfied or person not ascertained before the termination of the life estate, then the contingent remainder was destroyed. So in the following grant:
O to A for life, then to B if B graduates from law school,
if A died before B has graduated from law school, the property would revert to O (remembering that O always has a reversion when there is a contingent remainder) and stay with O in fee simple absolute. The law would say that the contingent remainder was destroyed when A died.
These days, most courts do not hold contingent remainders to be destructible. Rather, they are converted into springing executory interests. To explain what this means, consider the above grant. If A died before B graduated, the grant would be converted to a fee simple in O subject to B’s executory interest. If B graduates from law school, the property will spring from the grantor to B. It’s called a springing executory interest because meeting the condition divests the grantor, rather than a third party. When it divests a third party, we call it a shifting executory interest, and we have already covered these above.
Fifth, a life estate may grant possession to A but be set to expire not on A’s death but on B’s. This is called a life estate per autre vie. Here’s an example:
O to A for the life of B.
A has the present interest, which will expire when B dies. At that point, the property reverts to O, even if A is still alive.
Some interpretive doctrines
In addition to more modern regulations of the kinds of conditions that can be placed in grants, there are two old interpretive rules worth knowing. Each was once a widely adopted and absolute rule, meaning that they guided the interpretation of grants no matter how apparent the grantor’s intent to the contrary. Today, in most jurisdictions, each is only a rule of construction, meaning that the grantor’s intent will be followed if it clearly differs from the interpretations these rules would yield.
The Doctrine of Worthier Title
This doctrine applies to the following grant:
O to A for life, remainder in O’s heirs.
We have not yet discussed what an “heir” is, though you have doubtless heard the term and have some idea of its meaning. These days we mean by heir an individual who is legally entitled, by statute or by will, to inherit a decedent’s estate. People who die without wills are said to die intestate, and state statutes prescribe how their property is to be distributed on death. The most important thing to remember, though, is that a living person has no heirs. Until an individual dies, we do not know (a) who the living relatives are who would be entitled to take under an intestacy statute or (b) what the individual’s last will directs. Remember that a new will can be drafted at anytime, leaving the old one to have no effect.
The upshot is that the remainder in O’s heirs is, until O dies, a contingent remainder. We don’t know who those people are. This means that once O makes this grant, there’s no one we can buy the remainder from, to get back to a fee, until O dies and the heirs become identifiable. There is a strong policy against leaving property divided in such a state that it is impossible, or even extremely difficult, to consolidate into a fee. And so, there is some justification for interpreting the grant above as:
O to A for life.
This of course gives O a reversion and removes the remainder interest in the unascertained heirs. This interpretation is the doctrine of worthier title.
The Rule in Shelley’s Case
Here, we are concerned with the following grant:
O to A for life, remainder to A’s heirs.
The Rule in Shelley’s case converts this grant to:
O to A for life, remainder in A.
This grant invokes another rule, known as the merger doctrine, which provides that when two successive estates are owned by the same person, the two estates are merged, yielding whatever type of interest results. Here, if we merge the life estate and the remainder, that is, well, everything. So A has a fee simple absolute. Note that the rule would still operate, again as a rule of construction only, even if the two estates could not be merged. For example:
O to A for life, then to B for life, and then to A’s heirs.
The rule would turn this into:
O to A for life, then to B for life, then to A.
The merger doctrine does not apply, and this grant cannot be made simpler.
Questions to Be Resolved
Just because we now know how to reduce ideally phrased grant language into the discrete forms of the traditional estates, it does not follow that we have resolved every problem that can arise with grantor’s efforts to divide the timeline of future ownership. We will discuss three kinds of issues that can arise.
First is adjudicative: When we divide the timeline of ownership, those who occupy the property now may use it to the disadvantage of those will occupy later. What if the present owner wants or needs to sell the property but the future owner doesn’t want it sold? What if the present owner doesn’t maintain the property? Anytime property is owned by more than one human being, disagreements about how to use and care for that property are bound to arise.
Second is interpretive: Grantors can and do use odd, ambiguous, and contradictory language. We have to interpret their words and figure out which of the estates they meant to convey. This is accomplished using both standard issue interpretive canons (e.g. give words their plain meaning but interpret ambiguous phrases in the context of the whole document) and policy-laden presumptions (e.g., interpret restrictive conditions narrowly, and interpret to avoid forfeiture where possible).
Third is regulatory: Even if we know what grantor meant to do, we may not wish to allow it. There are three broad categories of regulation: (1) those meant to resolve disputes between owners of various slices of the timeline (usually a future interest holder suing to stop damage to the property by the present interest holder), (2) those concerned with preventing too much “dead-hand control,” and (3) those applying public policies that would apply generally but which may take on more salience in land transactions.
With respect to the second, it is important to remember that the ability to dictate how property should be distributed and on what conditions confers on a grantor some control over the future. Through a grant, O can dictate that alcohol not be served on the premises or that the property only be used for residential purposes. This regulatory power that will continue to be felt when O is long dead, thus the phrase “dead-hand control,” represents an instance of the problem law faces when adjudicating between the needs of the present and the prerogative of the future. The ability to grant property in this way is an incentive to acquire it and use it wisely. This benefits the present. But the chains it places on the future are, often, a cost. Some balance, it would seem, needs to be struck.
This account of dead-hand control is a tad misleading. After all O has no actual regulatory power over the property once it is granted away. If A’s ownership is limited by a condition that would see the property revert or go to some other party, A could always purchase that executory interest, merge the estates, and do as he or she pleases. O generally cannot dictate what happens on the property, but O can make it inconvenient or uneconomical to disobey his or her wishes. And as the number of parties with future interests rise and as they become difficult to ascertain, the transaction costs, setting aside the purchase prices, rise. Thus, dead-hand control is a concern, because O can indeed grant property in ways that make it extremely difficult to alienate and, therefore, extremely difficult to use as the present owner sees fit.
In the next sections, we will wrestle with these interpretive and regulatory issues.
- A child in utero counts as a child alive at the time of the grant.
- We do not consider B’s actual capacity to have children when labeling the grant. It doesn’t matter if B is 102 years old or physically disabled from having children. Even as a practical matter, B could adopt, and these days adopted children count as “children” in a grant, unless the grantor makes clear an intent otherwise.
Wood v. Board of County Commissioners of Fremont County,
759 P.2d 1250 (Wyo. 1988)
David B. Hooper and Kenneth E. Spurrier of Hooper Law Associates, P.C., Riverton, for appellants.
Stuart R. Day of Williams, Porter, Day & Neville, P.C., Casper, for appellee.
Before Brown, C.J., Thomas, Cardine and Macy, JJ., and Rooney, J. Retired.
Brown, Chief Justice.1
Appellants Cecil and Edna Wood, husband and wife, appeal summary judgment favoring appellee, the Board of County Commissioners for Fremont County, Wyoming. By a 1948 warranty deed appellants conveyed land in Riverton, Wyoming, to Fremont County for the construction of a county hospital. They now contend that language in the deed created either a fee simple determinable or a fee simple subject to a condition subsequent with a right of reversion in them if the land ceased to be used for the hospital. They present three issues:
A. Whether the district court erred by granting appellee’s motion for summary judgment.
B. Whether the district court erred by failing to grant appellant’s motion for partial summary judgment.
C. Whether cessation of appellee’s hospital operation by sale of public hospital facilities to a private company constituted the occurrence of an event which divested appellee of its estate in property conditionally conveyed by appellants.
The trial court found that appellants retained no interest in the land surrounding and under the old county hospital as a matter of law. We affirm.
On September 1, 1948, by warranty deed, appellants conveyed
[a] tract of land situated in the SE 1/4 SW 1/4, Sec. 26, Township 1, North Range 4 East, W.R.M., Fremont County, Wyoming, described * * * as follows: Beginning at the Southwest corner of said SE 1/4 SW 1/4, Sec. 26, aforesaid, thence east along the South line of said Section 310 feet, thence North at right angles to said South line 297 feet, thence West on a line parallel to said South line 310 feet, thence South 297 feet to the point of beginning, containing 2.1 acres * * *. Said tract is conveyed to Fremont County for the purpose of constructing and maintaining thereon a County Hospital in memorial to the gallant men of the Armed Forces of the United States of America from Fremont County, Wyoming * * *. (Emphasis added.)
This deed was recorded in the Fremont County Clerk’s Office on December 14, 1948. Appellee constructed a hospital on the land and operated it there until November 18, 1983. At that time appellee sold the land and the original hospital facility to a private company. The buyer operated a hospital on the premises until September, 1984, at which time it moved the operation to a newly constructed facility. The private company then put the premises up for sale.
Appellants filed their complaint in this case on January 16, 1986, seeking recovery of the value of the land they conveyed to the county in 1948. Appellee answered, and after discovery, filed a motion for summary judgment on October 14, 1987. Appellants filed their own motion for partial summary judgment on December 11, 1987. The trial court heard the motions on December 15, 1987, and granted summary judgment favoring appellees on January 13, 1988. This appeal followed.
The facts in this case are not in dispute and we review this order for summary judgment as a matter of law. Fitch v. Buffalo Federal Savings and Loan Association, 751 P.2d 1309, 1311 (Wyo. 1988). Appellants’ argument boils down to whether or not the language “* * * for the purpose of constructing and maintaining thereon a County Hospital in memorial to the gallant men of the Armed Forces of the United States of America from Fremont County, Wyoming * * *” in the 1948 warranty deed is sufficient limiting language to create either 1) a fee simple determinable, or 2) a fee simple subject to a condition subsequent giving appellants title to the land. We review disputed language in a deed to determine the intent of the parties to it from the plain language in the deed considered as a whole. Samuel Mares Post No. 8, American Legion, Department of Wyoming v. Board of County Commissioners of the County of Converse, 697 P.2d 1040, 1043 (Wyo. 1985) (quoting Knadler v. Adams, 661 P.2d 1052, 1053 (Wyo. 1983)). Also, W.S. 34-2-101 (1977) provides, in pertinent part:
[E]very conveyance of real estate shall pass all the estate of the grantor * * * unless the intent to pass a less estate shall expressly appear or be necessarily implied in the terms of the grant.
A fee simple estate in land that automatically expires upon the happening of a stated event, not certain to occur, is a fee simple determinable. Restatement of Property § 44 at 121 (1936). In Williams v. Watt, 668 P.2d 620, 627 (Wyo. 1983), we said:
The existence of an estate in fee simple determinable requires the presence of special limitations. Restatement of the Law of Property, § 44, p. 121. The term ‘special limitation’ denotes that part of the language of a conveyance which causes the created interest automatically to expire upon the occurrence of the stated event. Restatement of the Law of Property, § 23, p. 55. An estate in fee simple determinable may be created so as to be defeasible upon the occurrence of an event which is not certain ever to occur. Restatement of the Law of Property, § 44, p. 125.
Words such as “so long as,” “until,” or “during” are commonly used in a conveyance to denote the presence of this type of special limitation. Lacer v. Navajo County, 141 Ariz. 396, 687 P.2d 404, 408-409 (App. 1983). See also Restatement of Property § 44 at 128 (1936). The critical requirement is that the language of special limitation must clearly state the particular circumstances under which the fee simple estate conveyed might expire. See T. Bergin and P. Haskell, Preface to Estates in Land and Future Interests 48 (2d ed. 1984). Language of conveyance that grants a fee simple estate in land for a special purpose, without stating the special circumstances that could trigger expiration of the estate, is not sufficient to create a fee simple determinable. Lacer v. Navajo County, 687 P.2d at 408 (quoting Restatement of Property § 44 comment m at 129-130 (1936)).
The plain language in the 1948 deed, stating that appellants conveyed the land to Fremont County for the purpose of constructing a county hospital, does not clearly state that the estate conveyed will expire automatically if the land is not used for the stated purpose. As such, it does not evidence an intent of the grantors to convey a fee simple determinable, and we hold that no fee simple determinable was created when the land was conveyed.
Use of the language conveying the land in “memorial” similarly fails to create a fee simple determinable. “Memorial” is defined in Webster’s Third New International Dictionary 1409 (1971) as
[s]omething that serves to preserve memory or knowledge of an individual or event.
The time for which the hospital should serve to “preserve” the memory or knowledge is not stated in the deed, just as the time for maintaining the hospital is not there stated. The language of conveyance fails to designate the time at which the hospital must be constructed as well as the time during which it must be maintained or during which the indicated memory must be preserved. The omission of such limiting language evidences an intent not to convey a fee simple determinable.
Similar reasoning applies to appellants’ assertion that the language of conveyance created a fee simple subject to a condition subsequent. A fee simple subject to a condition subsequent is a fee simple estate in land that gives the grantor a discretionary power to terminate the grantee’s estate after the happening of a stated event, not certain to occur. Restatement of Property § 45 at 133 (1936 & Supp. 1948). This type of interest is similar to the fee simple determinable in that the language of conveyance must clearly state the grantor’s intent to create a discretionary power to terminate the estate he conveys. Lacer v. Navajo County, 687 P.2d at 409 (quoting Restatement of Property § 45 comments i and j at 138-139 (1936 & Supp. 1948). Words commonly used in a conveyance to denote the presence of a fee simple estate subject to a condition subsequent include “upon express condition that,” “upon condition that,” “provided that,” or “if.” Restatement of Property § 45 comments j through o at 139-143 (1936). In J.M. Carey & Brother v. City of Casper, 66 Wyo. 437, 213 P.2d 263, 268 (1950), we quoted 19 Am.Jur. Estates § 65 at 527 (1939), which said:
It is a well-settled rule that conditions tending to destroy estates, such as conditions subsequent, are not favored in law. They are strictly construed. Accordingly, no provision will be interpreted to create such a condition if the language will bear any other reasonable interpretation, or unless the language, used unequivocally, indicates an intention upon the part of the grantor or devisor to that effect and plainly admits of such construction. [Citations.]
That rule has not lost its potency. Applying it to this case, we hold that the plain language of the 1948 warranty deed, while articulating that the land conveyed was to be used for a county hospital, does not clearly state an intent of the grantors to retain a discretionary power to reenter the land if the land ceased to be used for the stated purpose. Appellants did not convey a fee simple subject to a condition subsequent, and we will not create one by construction some forty years after the conveyance took place.
Summary judgment is affirmed.
- Chief Justice, Retired, June 30, 1988.
White v. Brown,
559 S.W.2d 938 (Tenn. 1977)
Ted H. Lowe, Knoxville, for appellants.
Wallace F. Burroughs, Charles H. Child, Knoxville, E. T. Hollins, Jr., Nashville, for appellees.
This is a suit for the construction of a will. The Chancellor held that the will passed a life estate, but not the remainder, in certain realty, leaving the remainder to pass by inheritance to the testatrix’s heirs at law. The Court of Appeals affirmed.
Mrs. Jessie Lide died on February 15, 1973, leaving a holographic will which, in its entirety, reads as follows:
April 19, 1972
I, Jessie Lide, being in sound mind declare this to be my last will and testament. I appoint my niece Sandra White Perry to be the executrix of my estate. I wish Evelyn White to have my home to live in and not to be sold.
I also leave my personal property to Sandra White Perry. My house is not to be sold.
(Underscoring by testatrix).
Mrs. Lide was a widow and had no children. Although she had nine brothers and sisters, only two sisters residing in Ohio survived her. These two sisters quitclaimed any interest they might have in the residence to Mrs. White. The nieces and nephews of the testatrix, her heirs at law, are defendants in this action.
Mrs. White, her husband, who was the testatrix’s brother, and her daughter, Sandra White Perry, lived with Mrs. Lide as a family for some twenty-five years. After Sandra married in 1969 and Mrs. White’s husband died in 1971, Evelyn White continued to live with Mrs. Lide until Mrs. Lide’s death in 1973 at age 88.
Mrs. White, joined by her daughter as executrix, filed this action to obtain construction of the will, alleging that she is vested with a fee simple title to the home. The defendants contend that the will conveyed only a life estate to Mrs. White, leaving the remainder to go to them under our laws of intestate succession. The Chancellor held that the will unambiguously conveyed only a life interest in the home to Mrs. White and refused to consider extrinsic evidence concerning Mrs. Lide’s relationship with her surviving relatives. Due to the debilitated condition of the property and in accordance with the desire of all parties, the Chancellor ordered the property sold with the proceeds distributed in designated shares among the beneficiaries.
Our cases have repeatedly acknowledged that the intention of the testator is to be ascertained from the language of the entire instrument when read in the light of surrounding circumstances. See, e.g., Harris v. Bittikofer, 541 S.W.2d 372, 384 (Tenn. 1976); Martin v. Taylor, 521 S.W.2d 581, 584 (Tenn. 1975); Hoggatt v. Clopton, 142 Tenn. 184, 192, 217 S.W. 657, 659 (1919). But, the practical difficulty in this case, as in so many other cases involving wills drafted by lay persons, is that the words chosen by the testatrix are not specific enough to clearly state her intent. Thus, in our opinion, it is not clear whether Mrs. Lide intended to convey a life estate in the home to Mrs. White, leaving the remainder interest to descend by operation of law, or a fee interest with a restraint on alienation. Moreover, the will might even be read as conveying a fee interest subject to a condition subsequent (Mrs. White’s failure to live in the home).
In such ambiguous cases it is obvious that rules of construction, always yielding to the cardinal rule of the testator’s intent, must be employed as auxiliary aids in the courts’ endeavor to ascertain the testator’s intent.
In 1851 our General Assembly enacted two such statutes of construction, thereby creating a statutory presumption against partial intestacy.
Chapter 33 of the Public Acts of 1851 (now codified as T.C.A. ss 64-101 and 64-501) reversed the common law presumption1 that a life estate was intended unless the intent to pass a fee simple was clearly expressed in the instrument.T.C.A. § 64-501 provides:
Every grant or devise of real estate, or any interest therein, shall pass all the estate or interest of the grantor or devisor, unless the intent to pass a less estate or interest shall appear by express terms, or be necessarily implied in the terms of the instrument.
Chapter 180, Section 2 of the Public Acts of 1851 (now codified as T.C.A. § 32-301) was specifically directed to the operation of a devise. In relevant part, T.C.A. s 32-301 provides:
A will … shall convey all the real estate belonging to (the testator) or in which he had any interest at his decease, unless a contrary intention appear by its words and context.
Thus, under our law, unless the “words and context” of Mrs. Lide’s will clearly evidence her intention to convey only a life estate to Mrs. White, the will should be construed as passing the home to Mrs. White in fee. “‘If the expression in the will is doubtful, the doubt is resolved against the limitation and in favor of the absolute estate.’” Meacham v. Graham, 98 Tenn. 190, 206, 39 S.W. 12, 15 (1897) (quoting Washbon v. Cope, 144 N.Y. 287, 39 N.E. 388); Weiss v. Broadway Nat’l Bank, 204 Tenn. 563, 322 S.W.2d 427 (1959); Cannon v. Cannon, 182 Tenn. 1, 184 S.W.2d 35 (1945).
Several of our cases demonstrate the effect of these statutory presumptions against intestacy by construing language which might seem to convey an estate for life, without provision for a gift over after the termination of such life estate, as passing a fee simple instead. In Green v. Young, 163 Tenn. 16, 40 S.W.2d 793 (1931), the testatrix’s disposition of all of her property to her husband “to be used by him for his support and comfort during his life” was held to pass a fee estate. Similarly, in Williams v. Williams, 167 Tenn. 26, 65 S.W.2d 561 (1933), the testator’s devise of real property to his children “for and during their natural lives” without provision for a gift over was held to convey a fee. And, in Webb v. Webb, 53 Tenn. App. 609, 385 S.W.2d 295 (1964), a devise of personal property to the testator’s wife “for her maintenance, support and comfort, for the full period of her natural life” with complete powers of alienation but without provision for the remainder passed absolute title to the widow.
Thus, if the sole question for our determination were whether the will’s conveyance of the home to Mrs. White “to live in” gave her a life interest or a fee in the home, a conclusion favoring the absolute estate would be clearly required. The question, however, is complicated somewhat by the caveat contained in the will that the home is “not to be sold” a restriction conflicting with the free alienation of property, one of the most significant incidents of fee ownership. We must determine, therefore, whether Mrs. Lide’s will, when taken as a whole, clearly evidences her intent to convey only a life estate in her home to Mrs. White.
Under ordinary circumstances a person makes a will to dispose of his or her entire estate. If, therefore, a will is susceptible of two constructions, by one of which the testator disposes of the whole of his estate and by the other of which he disposes of only a part of his estate, dying intestate as to the remainder, this Court has always preferred that construction which disposes of the whole of the testator’s estate if that construction is reasonable and consistent with the general scope and provisions of the will. See Ledbetter v. Ledbetter, 188 Tenn. 44, 216 S.W.2d 718 (1949); Cannon v. Cannon, supra; Williams v. Williams, supra; Jarnagin v. Conway, 21 Tenn. 50 (1840); 4 Page, Wills § 30.14 (3d ed. 1961). A construction which results in partial intestacy will not be adopted unless such intention clearly appears. Bedford v. Bedford, 38 Tenn. App. 370, 274 S.W.2d 528 (1954); Martin v. Hale, 167 Tenn. 438, 71 S.W.2d 211 (1934). It has been said that the courts will prefer any reasonable construction or any construction which does not do violence to a testator’s language, to a construction which results in partial intestacy.Ledbetter, supra.
The intent to create a fee simple or other absolute interest and, at the same time to impose a restraint upon its alienation can be clearly expressed. If the testator specifically declares that he devises land to A “in fee simple” or to A “and his heirs” but that A shall not have the power to alienate the land, there is but one tenable construction, viz., the testator’s intent is to impose a restraint upon a fee simple. To construe such language to create a life estate would conflict with the express specification of a fee simple as well as with the presumption of intent to make a complete testamentary disposition of all of a testator’s property. By extension, as noted by Professor Casner in his treatise on the law of real property:
Since it is now generally presumed that a conveyor intends to transfer his whole interest in the property, it may be reasonable to adopt the same construction, (conveyance of a fee simple) even in the absence of words of inheritance, if there is no language that can be construed to create a remainder.
6 American Law of Property § 26.58 (A. J. Casner ed. 1952).
In our opinion, testatrix’s apparent testamentary restraint on the alienation of the home devised to Mrs. White does not evidence such a clear intent to pass only a life estate as is sufficient to overcome the law’s strong presumption that a fee simple interest was conveyed.
Accordingly, we conclude that Mrs. Lide’s will passed a fee simple absolute in the home to Mrs. White. Her attempted restraint on alienation must be declared void as inconsistent with the incidents and nature of the estate devised and contrary to public policy. Nashville C & S.L. Ry. v. Bell, 162 Tenn. 661, 39 S.W.2d 1026 (1931).
The decrees of the Court of Appeals and the trial court are reversed and the cause is remanded to the chancery court for such further proceedings as may be necessary, consistent with this opinion. Costs are taxed against appellees.
Harbison, Justice, dissenting.
With deference to the views of the majority, and recognizing the principles of law contained in the majority opinion, I am unable to agree that the language of the will of Mrs. Lide did or was intended to convey a fee simple interest in her residence to her sister-in-law, Mrs. Evelyn White.
The testatrix expressed the wish that Mrs. White was “to have my home to live in and not to be sold.” The emphasis is that of the testatrix, and her desire that Mrs. White was not to have an unlimited estate in the property was reiterated in the last sentence of the will, to wit: “My house is not to be sold.”
The testatrix appointed her niece, Mrs. Perry, executrix and made an outright bequest to her of all personal property.
The will does not seem to me to be particularly ambiguous, and like the Chancellor and the Court of Appeals, I am of the opinion that the testatrix gave Mrs. White a life estate only, and that upon the death of Mrs. White the remainder will pass to the heirs at law of the testatrix.
The cases cited by petitioners in support of their contention that a fee simple was conveyed are not persuasive, in my opinion. Possibly the strongest case cited by the appellants is Green v. Young, 163 Tenn. 16, 40 S.W.2d 793 (1931), in which the testatrix bequeathed all of her real and personal property to her husband “to be used by him for his support and comfort during his life.” The will expressly stated that it included all of the property, real and personal, which the testatrix owned at the time of her death. There was no limitation whatever upon the power of the husband to use, consume, or dispose of the property, and the Court concluded that a fee simple was intended.
In the case of Williams v. Williams, 167 Tenn. 26, 65 S.W.2d 561 (1933), a father devised property to his children “for and during their natural lives” but the will contained other provisions not mentioned in the majority opinion which seem to me to distinguish the case. Unlike the provisions of the present will, other clauses in the Williams will contained provisions that these same children were to have “all the residue of my estate personal or mixed of which I shall die possessed or seized, or to which I shall be entitled at the time of my decease, to have and to hold the same to them and their executors and administrators and assigns forever.”
Further, following some specific gifts to grandchildren, there was another bequest of the remainder of the testator’s money to these same three children. The language used by the testator in that case was held to convey the fee simple interest in real estate to the children, but its provisions hardly seem analogous to the language employed by the testatrix in the instant case.
In the case of Webb v. Webb, 53 Tenn. App. 609, 385 S.W.2d 295 (1964), the testator gave his wife all the residue of his property with a clear, unqualified and unrestricted power of use, sale or disposition. Thereafter he attempted to limit her interest to a life estate, with a gift over to his heirs of any unconsumed property. Again, under settled rules of construction and interpretation, the wife was found to have a fee simple estate, but, unlike the present case, there was no limitation whatever upon the power of use or disposition of the property by the beneficiary.
On the other hand, in the case of Magevney v. Karsch, 167 Tenn. 32, 65 S.W.2d 562 (1933), a gift of the residue of the large estate of the testator to his daughter, with power “at her demise (to) dispose of it as she pleases … .” was held to create only a life estate with a power of appointment, and not an absolute gift of the residue. In other portions of the will the testator had given another beneficiary a power to use and dispose of property, and the Court concluded that he appreciated the distinction between a life estate and an absolute estate, recognizing that a life tenant could not dispose of property and use the proceeds as she pleased. 167 Tenn. at 57, 65 S.W.2d at 569.
In the present case the testatrix knew how to make an outright gift, if desired. She left all of her personal property to her niece without restraint or limitation. As to her sister-in-law, however, she merely wished the latter have her house “to live in”, and expressly withheld from her any power of sale.
The majority opinion holds that the testatrix violated a rule of law by attempting to restrict the power of the donee to dispose of the real estate. Only by thus striking a portion of the will, and holding it inoperative, is the conclusion reached that an unlimited estate resulted.
In my opinion, this interpretation conflicts more greatly with the apparent intention of the testatrix than did the conclusion of the courts below, limiting the gift to Mrs. White to a life estate. I have serious doubt that the testatrix intended to create any illegal restraint on alienation or to violate any other rules of law. It seems to me that she rather emphatically intended to provide that her sister-in-law was not to be able to sell the house during the lifetime of the latter a result which is both legal and consistent with the creation of a life estate.
In my opinion the judgment of the courts below was correct and I would affirm.
I am authorized to state that Chief Justice HENRY joins in this opinion.
- Because the feudal lord granted land solely as compensation for personal services, the grant was for no longer than the life of the grantee. Later the grant was extended to the sons and other issue of the grantee under the designation of “heirs.” Heirs were thus entitled to stand in the place of their ancestor after his death if mentioned in the grant but only if specifically mentioned. Thereafter, the word “heirs,” when used in a conveyance to a man “and his heirs,” came to include collateral as well as lineal heirs, ultimately indicating that such grantee took an estate which would pass to his heirs or the heirs of anyone to whom he aliened it. That is, “heirs” ceased to be a word of purchase and became a word of limitation. 1 Tiffany, Real Property § 28 (3d ed. 1939).
John R. Edwards, Individually and as Executor, etc., et al. v. Beverly E. Bradley,
315 S.E.2d 196 (Va. 1984)
Daniel Hartnett, Accomac (Ayres, Hartnett & Custis, Accomac, on briefs), for appellants.
William King Mapp, Keller (Mapp & Mapp, Keller, on brief), for appellee.
Before Carrico, C.J., and Cochran, Poff, Compton, Stephenson, Russell and Thomas, JJ.
In this appeal, the question presented to us is whether by certain provisions in her will a testatrix devised a fee simple estate or a life estate in real property therein described.
Viva Parker Lilliston died testate in 1969. Her will dated January 12, 1957, duly probated with a 1958 codicil irrelevant to this case, provided in part as follows:
Item Twelve: I give and devise my farm situated on the Seaside from Locustville, in the County of Accomack, State of Virginia … to my daughter, Margaret Lilliston Edwards, upon the conditions, set out in Item Fourteen….
Item Fourteen: all gifts made to my daughter, Margaret L. Edwards, individually and personally, under Items Eleven and Twelve of this Will, whether personal estate or real estate, are conditioned upon the said Margaret L. Edwards keeping the gift or devise herein free from encumbrances of every description, and in the event the said Margaret L. Edwards shall attempt to encumber same or sell her interest, or in the event any creditor or creditors of said Margaret L. Edwards shall attempt to subject her interest in the gift or devise herein made to the payment of the debts of the said Margaret L. Edwards, then and in that event the interest of said Margaret L. Edwards therein shall immediately cease and determine, and the gift or devise shall at once become vested in her children, viz: Betty Belle Branch, Beverly Bradley, John R. Edwards, Bruce C. Edwards, Jill A. Edwards and Jackie L. Edwards, in equal shares in fee simple….
Margaret L. Jones, formerly Margaret L. Edwards, qualified as executrix under her mother’s will. In 1979, Jones sought to have her children and their spouses execute an agreement to consent to her selling the farm devised to her. Only a daughter, Beverly Bradley, and the latter’s husband declined to execute the agreement. In 1980, Jones died testate; in her will, executed in 1979, she left Bradley $1.00, and directed that the farm be sold and the proceeds distributed equally among her other children. The executors named in the will duly qualified. Bradley filed a bill of complaint in the trial court against these personal representatives and her five brothers and sisters,1 alleging that under the Lilliston will a life estate was devised to Jones with remainder to Jones’s children. Bradley sought to enjoin the sale or encumbrance of the farm without her consent and asked that her interest therein be determined.
After hearing evidence presented by Bradley, the trial court determined that Jones had not violated any of the conditions specified in the Lilliston will. Edwards presented no evidence. The trial judge issued a letter opinion in which he stated his conclusion that under the Lilliston will a life estate in the farm was devised to Jones with remainder to her six named children in fee simple. A final decree, incorporating the opinion by reference, was entered March 25, 1981. On appeal, Edwards argued before us that Jones had fee simple title subject to valid conditions subsequent or conditional limitations2 and, having not violated the conditions, could freely dispose of the farm by will as she chose. Edwards argued in the alternative on brief that if the conditions were invalid Jones was vested with fee simple title without restrictions or conditions even though such unconditional vesting would have been contrary to her mother’s intent to protect the farm from Jones’s creditors.
There is no conflict in the evidence. Jones was in financial difficulties when the Lilliston will was executed. The will was prepared by an experienced attorney. One provision, referring specifically to the enabling statute, established a spendthrift trust for the benefit of another child of the testatrix.
The trial judge, in his opinion, noted that the “able and experienced” draftsman had used the words “fee simple” at least seven times in the will and codicil. Apparently, the judge reasoned that if a fee simple estate had been intended for Jones, the draftsman would have used that terminology in Item Twelve. Moreover, the judge stated that under Edwards’s theory that Jones died vested with fee simple title, a creditor could then bring a creditor’s suit to subject the land to the satisfaction of the debt contrary to the testamentary conditions and the intent of Lilliston. The judge further stated that the conditions set forth in Item Fourteen were repugnant to a fee simple estate but not to an estate for life. For these reasons, he ruled that a life estate was created under the Lilliston will.
As a general rule, a condition totally prohibiting the alienation of a vested fee simple estate or requiring a forfeiture upon alienation is void. See Dunlop v. Dunlop’s Ex’rs, 144 Va. 297, 132 S.E. 351 (1926); Hutchinson v. Maxwell, 100 Va. 169, 40 S.E. 655 (1902); In Re Anderson’s Estate, 267 Minn. 264, 126 N.W.2d 250 (1964); 1 Minor § 553; Restatement of Property, § 406 (1944). As an exception to the rule, conditions prohibiting alienation of land granted to corporate entities for their special purposes are valid. 1 Minor § 557; see Fairfax Park Authority v. Brundage, 208 Va. 622, 159 S.E.2d 831 (1968). A conditional limitation imposed upon a life estate, however, is valid. Mears v. Taylor, 142 Va. 824, 128 S.E. 264 (1925); Camp v. Cleary, 76 Va. 140 (1882); 1 Minor § 559. See also Restatement on Property § 409 (1944), where such limitations, therein classified as forfeiture restraints, are said to be valid as to life estates.
It is apparent, therefore, that if Lilliston’s will vested fee simple title to the farm in Jones, the unqualified restraint on alienation would be invalid and the property from the time of vesting would be subject to sale, encumbrance, or devise by her and subject to the claims of her creditors, results contrary to the express intent of the testatrix. On the other hand, if Lilliston’s will vested a life estate in Jones, the unqualified restraint on alienation imposed by the testatrix would be valid. Jones could not acquire, as Edwards suggested, a life estate which, upon compliance with the testamentary conditions, became a fee simple estate at the time of her death. Jones acquired under the Lilliston will either a fee simple estate free of conditions and thus inconsistent with the testatrix’s intent or a life estate subject to conditions and thus consistent with such intent.
The draftsman of the Lilliston will carefully avoided using in either Item Twelve or Item Fourteen the words “fee simple” which he had used elsewhere in the instrument. It is true, as Edwards observed, that he also did not use the words “life estate” in those clauses of the will. Under Code § 55-11 it is not necessary to use the words “in fee simple” to create a fee simple estate where real estate is devised without words of limitation unless a contrary intention shall appear by the will. In the present case, however, the real estate was devised with words of limitation and a contrary intention appears in the will. Moreover, unless there is a power of disposal in the first taker (Code § 55-7), a life estate may be created by implication as well as by explicit language, provided the will shows the requisite intent. Robinson v. Caldwell, 200 Va. 353, 105 S.E.2d 852 (1958).
Since the testatrix established a spendthrift trust in another provision of her will, she was aware of the availability of that device but did not choose to use it for the benefit of Jones. Moreover, under Code § 55-7, the testatrix could have devised the land to Jones for life with a power of appointment under which Jones could have disposed of the property by will. She did not do so.
The intention of the testatrix is to be upheld if the will can be reasonably construed to effectuate such intent and if it is not inconsistent with an established rule of law. Powell v. Holland, 224 Va. 609, 615, 299 S.E.2d 509, 512 (1983); Hurt v. Hurt, 121 Va. 413, 420, 93 S.E. 672, 674 (1917). In addition, the language of the will is “to be understood in the sense in which the circumstances of the case show” that the testatrix intended. Gray v. Francis, 139 Va. 350, 361-62, 124 S.E. 446, 450 (1924). Here, the testatrix intended that Jones have the use and benefit of the real estate free of the claims of her creditors. The ultimate beneficiaries were Jones’s children. Although the will did not expressly designate the children as remaindermen, the conditional limitation to them indicated that they were intended to take the farm when their mother’s interest terminated, whether by violation of the conditions or otherwise. Accordingly, we conclude that the trial court properly ruled that Jones acquired a life estate in the property with remainder at her death in fee simple to her six children.
We will affirm the decree of the trial court.
- Named as defendants were John R. Edwards, individually and as executor of the estate of Margaret L. Jones; Betty Belle Branch, individually and as executrix of the estate of Margaret L. Jones; Henry P. Custis, Jr., executor of the estate of Margaret L. Jones; Bruce E. Edwards, Jill E. Godwin, and Jackie L. Spicer. They will be referred to herein collectively as Edwards.
- The terms “condition subsequent” and “conditional limitation” are not interchangeable. A conditional limitation provides for the future estate of freehold vested in one person to shift to another upon the happening of a contingency. An estate upon condition subsequent terminates upon the happening of a contingency, but instead of shifting to another, it returns to the grantor. 1 Minor on Real Property § 526 (2d ed. Ribble 1928) (hereinafter Minor). Thus, we are dealing with conditional limitations in the present case.
In each problem, identify the interests. You may also practice applying the Rule Against Perpetuities and reform the grant if necessary. If the name of the interest or its validity depends on information not supplied, state what information is needed and how it would affect your answer.
- O to A so long as A stays in school.
- O to A for life, then to B if B survives A.
- O to A for life, then to B and his children.
- I grant Blackacre to A so that he may raise his children there.
- I grant Blackacre to A, but if A dies in the next twenty years, I want the property to go to B.
- To A and his heirs so long as used as a residence.
- To A, but if A dies, then to B.
- To A for life when A marries, then to A’s widow for life if she survives A, otherwise to B for life, then to C.
- To A for so long as A lives on the property.
- To A for life, then to B if B lives at least one year after A’s death.
- I give Blackacre to A and his heirs, but if A ever drinks or smokes, then Blackacre is to go to B.
- To A so long as illegal drugs are not used on the premises, and if illegal drugs are used on the premises, then to B.
- To A, but if illegal drugs are ever used on the premises, then to B.
- To A, but if illegal drugs are used on the premises within 21 years of the death of Ewan McGregor, then to B.
- To A, but if illegal drugs are used on the premises within 21 years of the death of the last surviving member of the cast and crew of Star Wars Episode Three, then to B.
- To A for life, then to any of A’s children who graduate from high school.
- After a long life blessed with good fortune, I feel it is time to give something back. Thus, I leave Blackacre to the United Way. However, if Blackacre is ever used for commercial gain, the United Way’s interest will terminate.
- In a (long) will: Blackacre has been in my family for 200 years. It is my honor to leave this property to my good friend Melinda Marsh so that she can raise her children there. All interests not specifically devised above are to go to the Red Cross, but if the Red Cross ever engages in lobbying, then to UNICEF.
- To A for life, then to A’s children for life, then, after all of A’s children have died, to Habitat for Humanity for housing volunteers. A has no children at the time of the grant.
- To A for life, then to such of A’s children who graduate from college before A’s death for their lives, then to the first child born to my daughter C.
- To A for five years, then to my oldest great-grandchild then living for life, then to B.
- To A for life so long as no trees are cleared from the grounds, then to B, but if B clears trees from the grounds, then to C and his heirs.
- To A for life, then to A’s children for life, then to ACME Corp.
Answers to Estates Problems
1. O to A so long as A stays in school.
A has a fee simple determinable, and (therefore) O has a possibility of reverter. The “so long as” durational language is interpreted as a clear intent to create a fee simple determinable.
That said, one might argue that A can only stay in school during A’s life – and so this is at most a life estate. If that were the case, we’d have a life estate determinable in A, a possibility of reverter in O (becoming possessory on violation of the condition), and a reversion in O (becoming possessory on A’s death). I’d give credit for this.
But I think the court’s presumption in favor of a fee simple interest would lead a court to interpret this grant as meaning that A could keep the property if he or she did not drop out of school. That is, dropping out would be a condition that should terminate the A’s interest.
2. O to A for life, then to B if B survives A.
A has a life estate. B has a contingent remainder (there’s a condition precedent to B’s taking, and the “if B survives A” bit is part of the “to B” clause, not separate). But that’s not all! O has a reversion. (To see this, think about what happens if B does not survive A.)
3. O to A for life, then to B and his children.
A has a life estate. B and any of B’s children alive at the time of the grant have a vested remainder subject to open. (B’s alive and named – he or she will definitely get something when A dies. But that something may become less as B has more children.)
4. I grant Blackacre to A so that he may raise his children there.
A has a fee simple absolute. The extra language is just a statement of purpose and desire. It is not explicit enough, in light of the presumption against conditions, to conclude that grantor intended to create a condition that could lead to termination of A’s ownership. In other words, the extra language is precatory, and as in Wood will not be interpreted to create a defeasible fee.
5. I grant Blackacre to A, but if A dies in the next twenty years, I want the property to go to B.
A has a fee simple subject to B’s shifting executory interest. Note that A has more than a life estate. If A does not die in the next twenty years, the property will never go to B. Just because the condition involves A’s death does not automatically turn this into a life estate.
6. To A and his heirs so long as used as a residence.
A has a fee simple determinable. O has a possibility of reverter. (I’ll use O to refer to the grantor throughout.)
7. To A, but if A dies, then to B.
This grant has the form of a fee simple subject to an executory limitation. But a fee simple is an estate of potentially infinite duration, whereas A’s interest will terminate when A dies – presumably an event certain to happen within a finite amount of time. This grant will be interpreted as a life estate in A with an indefeasibly vested remainder in B.
8. To A for life when A marries, then to A’s widow for life if she survives A, otherwise to B for life, then to C.
A has a springing executory interest for life. Note that O has the fee simple at the time of the grant and that A only takes when A marries. Taking the grant in order, we next have a contingent remainder for life in A’s widow. We don’t know who this person might be or whether this person will satisfy the condition of surviving A. B has an alternative contingent remainder for life and only takes if A’s widow fails to survive A. C has an indefeasibly vested remainder, since whether A’s widow or B takes after A dies, C is sure to take after their deaths.
An aside: the merger doctrine will result in the destruction of a contingent remainder in the following circumstance. When a vested estate and the next vested estate following are owned by the same person, the estates are merged, destroying an intervening contingent remainder – unless the two vested interests were placed in the same person by the same grant. Upshot. O to A for life, then to the first child of A to graduate high school before A’s death for life, then to C. If C later acquires A’s life estate, or if A later acquires C’s absolutely vested remainder, the life estate and vested remainder are merged into a fee simple absolute, and the contingent remainder is destroyed. I won’t ask you to apply this doctrine, but I wanted to flag the issue here.
9. To A for so long as A lives on the property.
What did O intend to give A? One way to read this is as a fee simple determinable (with corresponding possibility of reverter in O). If A lives on the property A’s whole life, then A will have continuously satisfied the condition, and the property will be distributed on A’s death according to A’s will – free of the condition. After all, once A dies, it will not be possible for A to live anywhere else.
On the other hand, the grant could be read to give to A the property but only while A lives on it and no longer. So A would get a life estate determinable, as if the grant had said: To A for life so long as A lives on the property. O has a reversion (remember that a “remainder” in the grantor is called a reversion) and a possibility of reverter (the interest that will cut short A’s life estate if A violates the condition).
10. To A for life, then to B if B lives at least one year after A’s death.
A has a life estate. B has what looks like a contingent remainder. However, B will not take immediately on A’s death. A remainder interest is that interest that follows immediately after the end of the prior life estate. Here there’s a gap, and that’s enough to make this interest something other than a remainder.
Thinking about what will happen here, we see that A has a life estate, then O has a reversion – We know that O (or O’s heirs) will get the property back for at least a year. B has a springing executory interest, with B cutting short O’s ownership if B satisfies the condition of surviving A by at least one year.
11. I give Blackacre to A and his heirs, but if A ever drinks or smokes, then Blackacre is to go to B.
A has a fee simple subject to B’s shifting executory interest.
12. To A so long as illegal drugs are not used on the premises, and if illegal drugs are used on the premises, then to B.
A has a fee simple subject to B’s shifting executory interest.
13. To A, but if illegal drugs are ever used on the premises, then to B.
The interests are identical to those in problems 6 and 7, but the language of the grant is different. These three problems are mainly interesting for their treatment under the Rule Against Perpetuities.
14. To A, but if illegal drugs are used on the premises within 21 years of the death of Ewan McGregor, then to B.
15. To A, but if illegal drugs are used on the premises within 21 years of the death of the last surviving member of the cast and crew of Jaws, then to B.
16. To A for life, then to any of A’s children who graduate from high school.
This grant could arise in several factual circumstances.
(1) A has no children alive at the time of the grant. Then, A has a life estate, and there is a contingent remainder in A’s children. O has a reversion. (Though one might be tempted to label the future interest in O a “possibility of reverter,” since it will only be realized in possession if the condition is satisfied, the texts refer to O’s interest, like all interests in grantors following life estates, as a reversion. I suppose the idea is that the happening of the contingency would divest O’s reversion interest.)
(2) A has a child at the time of the grant, but the child has not yet graduated from high school. The remainder is still contingent.
(3) At the time of the grant, A has a child, B, who has graduated high school. In this case, A has a life estate, and B has a vested remainder subject to open (also called a vested remainder subject to partial defeasance).
17. After a long life blessed with good fortune, I feel it is time to give something back. Thus, I leave Blackacre to the United Way. However, if Blackacre is ever used for commercial gain, the United Way’s interest will terminate.
The second sentence appears to leave Blackacre to the United Way in fee simple absolute. The third sentence then sets out a condition under which that interest may terminate. As we’ve seen, many courts read grants with a presumption against automatic forfeiture – and so might even interpret grants that use the durational language characteristic of fee simple determinable grants as fees simple subject to conditions subsequent.
However, this grant makes pretty clear that the interest will terminate immediately on violation of the condition. In other words, there is language in the grant indicating grantor intended forfeiture. So I would interpret this as a fee simple determinable in the United Way. O retains a possibility of reverter. However, it’s possible to argue that the grant did not say “immediately” or that magic words like “so long as” or “until” were not used to describe the present interest. So you could argue that we have a f.s.s.c / right of entry here.
18. In a (long) will: Blackacre has been in my family for 200 years. It is my honor to leave this property to my good friend Melinda Marsh so that she can raise her children there. All interests not specifically devised above are to go to the Red Cross, but if the Red Cross ever engages in lobbying, then to UNICEF.
The issue in this problem is whether the phrase “so that she can raise her children there” is merely precatory or is meant to have substantive bite. If it’s precatory, then Melinda takes a fee simple absolute. The language disposing of any residual property doesn’t apply to this grant (but perhaps to other interests in other property devised in this “long” will). Grantor’s indications of hope or purpose are not read to limit the interest conveyed unless an intent to limit is found. There’s a good argument that here the grantor was merely explaining why Melinda got Blackacre. It would be helpful to compare this grant with others in the “long” will to see whether this was grantor’s style. If you called this precatory and stopped here, that would be fine.
An argument could also be made, though by far the weaker one unless a look at the whole will makes this intent clearer, that the gift of Blackacre was saddled with the condition that Melinda raise her children there. If this were a condition, so that the phrase is read to mean: To Melinda while she raises her children there – then Melinda might have a fee simple determinable with a possibility of reverter in O. But there are two problems with this. First, the fee simple is an estate of potentially infinite duration. Melinda cannot possibly raise her children on Blackacre after her death. So the grant is better read as a life estate – subject to earlier defeasance if Melinda stops raising children on the property. Second, the residual clause gives all undevised interests to the Red Cross. So grantor, under this interpretation, probably intended for the Red Cross to take both the remainder and the shifting executory interest. Let’s rewrite the grant according to these interpretations:
To Melinda for life and while she raises her children there, but if she stops raising children there or if she dies, then to the Red Cross, but if the Red Cross ever engages in lobbying then to UNICEF.
I think this is a far less plausible reading of grantor’s intent than the “precatory interpretation” above, but let’s analyze it nonetheless just to get practice. Melinda has a life estate subject to Red Cross’s shifting executory interest. Red Cross has, in addition to the shifting executory interest, a vested remainder subject to divestment, and UNICEF has a shifting executory interest.
19. To A for life, then to A’s children for life, then, after all of A’s children have died, to Habitat for Humanity for housing volunteers. A has no children at the time of the grant.
A has a life estate. There is a contingent remainder in A’s children, because A has no children now but could in the future. Habitat Humanity has a vested remainder – whether it’s indefeasibly vested or subject to divestment depends on whether the “for housing volunteers” language is precatory. I think it would be so considered.
20. To A for life, then to such of A’s children who graduate from college before A’s death for their lives, then to the first child born to my daughter C.
A has a life estate. The gift to A’s children is either a contingent remainder or a vested remainder subject to open (if there’s at least one child who has met the condition).
If C already has a child at the time of the grant, then that (first) child has an indefeasibly vested remainder. If the child dies, the child’s heirs will take – even if C has subsequent children before the remainder becomes possessory.
If C has no children at the time of the grant, then there is contingent remainder in the unascertained child.
21. To A for five years, then to my oldest great-grandchild then living for life, then to B.
We haven’t covered the kind of interest A has yet. But you do know enough to know what it is not. It is not a kind of fee interest. Fees are estates of potentially infinite duration. This is an estate of finite duration. It is also not a life estate. Instead, it’s a term of years.
There is a contingent remainder for life in the oldest great-grandchild then living. It’s a remainder interest because it follows the natural termination of the prior estate. (And it’s a remainder rather than a reversion because it’s in someone other than the grantor.) It’s contingent because the grant is to an unascertained person. We don’t know who the oldest great-grandchild will be after the five-year period, or even if there will be any great-grandchild alive at that time.
B has an indefeasibly vested remainder.
22. To A for life so long as no trees are cleared from the grounds, then to B, but if B clears trees from the grounds, then to C and his heirs.
This grant is a little tricky to interpret. A has a life estate subject to a condition. But what did grantor intend to happen upon violation of the condition? The phrase “then to B” might indicate that B gets the remainder or that B has an executory interest – or both.
In my mind, the most natural reading is that A has a life estate subject to B’s executory limitation and B has, in addition, a vested remainder subject to divestment. C has an executory interest. That is, A has a life estate, but if the condition is violated, then the property goes to B, and in any event B gets the property at A’s death.
C’s executory interest is also tricky to interpret. Does C take if anyone clears trees or only if B clears trees? We might argue that grantor clearly intended that no one should clear trees. But if that’s the case why did grantor write “if B clears trees” in the condition on B’s estate but not “if A clears trees” in the condition on A’s estate?
To see why grantor probably did this, we first need to know how to apply the Rule Against Perpetuities. As in the Edwards v. Bradley case, a court is likely to interpret a grant to avoid a rule violation where possible.
23. To A for life, then to A’s children for life, then to ACME Corp.
A has a life estate. The remainder interest in A’s children is either contingent or a vested remainder subject to open (if A has children at the time of the grant). ACME Corp. has an absolutely vested remainder.
2.2. Rule Against Perpetuities
Old Port Cove Holdings, Inc. v. Old Port Cove Condominium Association One, Inc.,
986 So.2d 1279 (Fla. 2008)
Jack J. Aiello and Nicole K. Atkinson of Gunster, Yoakley and Stewart, P.A., West Palm Beach, FL, for Petitioners.
Daniel S. Rosenbaum, Richard Valuntas and John M. Siracusa of Becker and Poliakoff, P.A., West Palm Beach, FL, for Respondent.
We consider the parameters of a doctrine that has been “long cherished by law school professors and dreaded by most law students: the infamous rule against perpetuities.” Byke Constr. Co. v. Miller, 140 Ariz. 57, 680 P.2d 193, 194 (Ct.App.1984); see also Shaver v. Clanton, 26 Cal.App.4th 568, 31 Cal.Rptr.2d 595, 596 (1994) (describing the rule against perpetuities as “every first-year law student’s worst nightmare”). Specifically, we must decide whether section 689.225, Florida Statutes (2000), which addresses the same rule, retroactively abrogated the common law rule. We also consider whether the rule applies to rights of first refusal, which are at issue here… . .
I. FACTS AND PROCEDURAL HISTORY
This case stems from an agreement (“the Agreement”) executed over thirty years ago (in 1977) in which Old Port Cove Investment granted Old Port Cove Condominium Association One, Inc. (“the Association”) a right of first refusal in a parcel of property. The Agreement provides, in pertinent part:
In the event that OPCI elects to sell the real property … other than to the persons or corporations which form the OPCI JOINT VENTURE, or to any corporation or other entity owned or controlled by OPCI or by any member of said JOINT VENTURE, or a successor or successors “to the interest of any member in the JOINT VENTURE”, the ASSOCIATION shall have the right of first refusal for the purchase of said real property upon the same terms and conditions as are proposed for its sale and purchase by OPCI, said right of first refusal to be exercised by the ASSOCIATION within thirty (30) days following written notice to it of such proposed sale, following which said right of first refusal shall terminate.
Old Port Cove Holdings, Inc. and Old Port Cove Equities, Inc. (“Owners”) the successors-in-interest to the OPCI Joint Venture, now own the property, which is used as a parking lot for an adjacent marina they own.
Twenty-five years after the Agreement, in 2002, the Owners sued to obtain a declaratory judgment and to quiet title to the property, arguing that the right of first refusal violates the common law rule against perpetuities. The Association contested the suit, raising several defenses and counterclaiming for a declaratory judgment and reformation of the Agreement. The trial court declared the right of first refusal void ab initio and quieted title in the Owners’ favor… . . On appeal, the Fourth District Court of Appeal reversed. Old Port Cove, 954 So.2d at 743… . .
II. THE HISTORY OF THE RULE AGAINST PERPETUITIES
The rule against perpetuities developed through a series of English cases beginning in 1682 and spanning about 150 years. See 10 Richard R. Powell, Powell on Real Property § 71.02 (Michael Allan Wolf ed.2007). At one time, the common law rule was a part of the law of nearly every jurisdiction in the United States. Id. § 71.03. By the end of the twentieth century, however, only a handful of jurisdictions still followed it. Id. Today, perpetuities law varies from state to state. See Lynn Foster, Fifty-One Flowers: Post-Perpetuities War Law and Arkansas’s Adoption of USRAP, 29 U. Ark. Little Rock L.Rev. 411, 411-13 (2007); Frederick R. Schneider, A Rule Against Perpetuities for the Twenty-First Century, 41 Real Prop. Prob. & Tr. J. 743, 747-48 (2007).
In Florida, the rule has had a rocky history. It was first adopted judicially, as part of the common law. It was later adopted legislatively, then replaced with a uniform rule, and now it has been legislatively abolished. To provide context for our discussion, we briefly discuss this history.
A. The Common Law Rule against Perpetuities
The rule against perpetuities is generally stated with deceptive simplicity as follows: “No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.” Iglehart v. Phillips, 383 So.2d 610, 614 (Fla.1980) (quoting John Chipman Gray, The Rule Against Perpetuities, § 201 (4th ed.1942)). The rule “was designed to prevent the perpetual entailment of estates and give them over to free and unhampered conveyance.” Story v. First Nat’l Bank & Trust Co., 115 Fla. 436, 156 So. 101, 104 (1934); see also Iglehart, 383 So.2d at 613 (recognizing that the rule’s “purpose is to ensure that property is reasonably available for development by prohibiting restraints that remove property from a beneficial use for an extended period of time”). We have explained that the rule is “more accurately speaking, the rule against remoteness or remote vesting of an estate or interest therein.” Adams v. Vidal, 60 So.2d 545, 549 (Fla.1952). “It is not a rule that invalidates interests which last too long, but interests which vest too remotely. In other words, the rule is concerned not with the duration of estates but with the time of their vesting.” Iglehart, 383 So.2d at 614.
B. The Statutory Rule and Its Various Amendments
The rule against perpetuities has been adopted by statute, amended, and later abrogated. The Legislature first codified the rule in 1977. The statutory rule provided:
STATEMENT OF THE RULE. – No interest in real or personal property is valid unless it must vest, if at all, not later than 21 years after one or more lives in being at the creation of the interest and any period of gestation involved. The lives measuring the permissible period of vesting must not be so numerous or designated in such a manner as to make proof of their end unreasonably difficult.
Ch. 77-23, § 1, Laws of Fla. (codified at § 689.22(1), Fla. Stat. (1979)). The statute exempted various interests, including “[o]ptions to purchase in gross or in a lease or preemptive rights in the nature of a right of first refusal,” but limited them to forty years. Ch. 77-23, § 1, Laws of Fla. (codified at § 689.22(3)(a)(7) (1979)).1
In 1988, the Legislature “replac[ed] the existing statutory rule with the ‘Florida Uniform Statutory Rule Against Perpetuities.’” Ch. 88-40, Laws of Fla. It states the rule as follows:
(2) STATEMENT OF THE RULE.–
(a) A nonvested property interest in real or personal property is invalid unless:
1. When the interest is created, it is certain to vest or terminate no later than 21 years after the death of an individual then alive; or
2. The interest either vests or terminates within 90 years after its creation.
Id. § 1 (codified at § 689.225(2), Fla. Stat. (1989)). With eight exceptions, the statute excludes nonvested property interests and powers of appointment arising out of “a nondonative transfer.” Id. (codified at § 689.225(5)(a), Fla. Stat. (1989)). The law also added, among other things, a provision through which interests created before October 1, 1988, that violate the rule against perpetuities could be reformed “in the manner that most closely approximates the transferor’s manifested plan … and is within the limits of the rule against perpetuities applicable when the nonvested property interest or power of appointment was created.” Id. (codified at § 689.225(6)(c), Fla. Stat. (1989)).
In 2000, the Legislature added the following language to section 689.225(7): “This section is the sole expression of any rule against perpetuities or remoteness in vesting in this state. No common-law rule against perpetuities or remoteness in vesting shall exist with respect to any interest or power regardless of whether such interest or power is governed by this section.” Ch. 2000-245, § 1, Laws of Fla. (codified at § 689.225(7), Fla. Stat. (2001)). The Fourth District relied primarily on this language to conclude that “[r]etroactive application could hardly have been stated more clearly.” Old Port Cove, 954 So.2d at 745.
Having explained the history of the rule in Florida, we now address the issues presented.
We address two issues involving the rule against perpetuities. The first – the issue on which the district court certified conflict – is whether the legislative abrogation of the rule applies retroactively. We resolve the conflict by holding that, based on the language of the statute itself, abrogation of the rule does not apply retroactively. The second issue, on which conflict also exists (albeit in dictum), is whether the common law rule against perpetuities even applies to rights of first refusal. On that issue, we conclude that, because the same concerns about remote vesting do not exist with respect to rights of first refusal, the rule does not apply to such rights.
A. Retroactive Abrogation
In the absence of clear legislative intent to the contrary, a law is presumed to operate prospectively. State v. Lavazzoli, 434 So.2d 321, 323 (Fla.1983); see also Metro. Dade County v. Chase Fed. Hous. Corp., 737 So.2d 494, 499 (Fla.1999) (“[R]equiring clear intent assures that [the legislature] has itself affirmatively considered the potential unfairness of retroactive application and determined that it is an acceptable price to pay for the countervailing benefits.” (quoting Arrow Air, Inc. v. Walsh, 645 So.2d 422, 425 (Fla.1994))). In determining whether a statute applies retroactively, we consider two factors: (1) whether the statute itself expresses an intent that it apply retroactively; and, if so, (2) whether retroactive application is constitutional. See, e.g., Chase Fed., 737 So.2d at 499. We conclude that the plain language of section 689.225 does not evince an intent that the statute apply retroactively. We therefore need not address the second prong. See, e.g., Memorial Hosp.-W. Volusia, Inc. v. News-Journal Corp., 784 So.2d 438, 441 (Fla.2001) (finding it unnecessary to reach the second prong of the retroactivity analysis absent clear legislative intent to apply the statute retroactively).
B. The Rule Against Perpetuities Does Not Apply to Rights of First Refusal
While we have resolved the certified conflict, the decisive question in this case is whether rights of first refusal are subject to the common law rule in the first place. Rights of first refusal are not subject to the statutory rule. See § 689.225(5)(a), Fla. Stat. (2007). We conclude they are not subject to the common law rule, either.
To decide whether a right of first refusal violates the rule, we must first define a right of first refusal. As one court has explained it,
A right of first refusal is a right to elect to take specified property at the same price and on the same terms and conditions as those contained in a good faith offer by a third person if the owner manifests a willingness to accept the offer. The right of first refusal ripens into an option once an owner manifests a willingness to accept a good faith offer.
Pearson v. Fulton, 497 So.2d 898, 900 (Fla. 2d DCA 1986). Rights of first refusal are also known as preemptive rights. See 6 Am. L. Prop. § 26.66 (1952). Such rights vary in form: some require offering the property at a fixed price (or some price below market value), while others (like the one here) simply allow the holder to purchase the property on the same terms as a third party. See Shiver v. Benton, 251 Ga. 284, 304 S.E.2d 903, 905 (1983). They are akin to – and sometimes confused with – options. See Steinberg v. Sachs, 837 So.2d 503, 505 (Fla. 3d DCA 2003); Points v. Barnes, 301 So.2d 102, 104 (Fla. 4th DCA 1974). An option contract is “a unilateral contract which gives the option holder the right to purchase under the terms and conditions of the option agreement.” S. Inv. Corp. v. Norton, 57 So.2d 1, 2 (Fla. 1952). Unlike an option, however, a right of first refusal does not grant the power to compel an unwilling owner to sell. See, e.g., 6 Am. L. Prop. § 26.64.
Whether the common law rule against perpetuities applies to a right of first refusal is a question of first impression in this Court. The district courts are divided on the issue. Compare Old Port Cove, 954 So.2d at 743 (doubting that the rule applied to rights of first refusal); and Warren v. City of Leesburg, 203 So.2d 522, 526 (Fla. 2d DCA 1967) (suggesting that the rule does not apply to rights of first refusal); with Fallschase, 696 So.2d at 835 (holding that the rule does apply to rights of first refusal); Reagan, 321 So.2d at 133 (same); and Points, 301 So.2d at 104 (same).
Other jurisdictions are likewise split. Of those that have considered this issue, a majority have concluded that the rule applies to rights of first refusal.2 A notable minority, however, has held otherwise.3 We find the minority view more consistent with Florida law.
Where they discuss the rationale, courts adopting the majority view generally conclude that an option or right of first refusal creates an interest in property. Ferrero, 536 A.2d at 1139 (“As rights of first refusal are interests in property, the great majority of American jurisdictions have applied the Rule Against Perpetuities to such rights.”); see, e.g., Stuart Kingston, 596 A.2d at 1384; Gore, 867 P.2d at 338; Martin, 348 N.E.2d at 309; Pace, 347 So.2d at 1317; Melcher, 435 P.2d at 114; McHugh, 380 S.E.2d at 874; Smith, 296 S.E.2d at 854. In Florida, however, an option does not create a legal or equitable interest in property. As we explained over fifty years ago, “until an optionee exercises the right to purchase in accordance with the terms of his option he has no estate, either legal or equitable, in the lands involved.” Gautier v. Lapof, 91 So.2d 324, 326 (Fla.1956). We have since reiterated that principle. See Leon County Educ. Facilities Auth. v. Hartsfield, 698 So.2d 526, 530 (Fla.1997) (“[T]his Court has long held that the status of parties to the ordinary lease with an option to purchase remains that of landlord and tenant until the option is exercised and that the lessee has no equitable interest in the property.”); BancFlorida v. Hayward, 689 So.2d 1052, 1054 (Fla.1997) (“Under Florida law, an option to purchase property creates neither an equitable interest nor an equitable remedy.”).
As these cases show, Florida law has consistently held that an option does not create an interest in land. Therefore, a right of first refusal – which may or may not ripen into an option depending on whether the owner decides to sell, see, e.g., Pearson, 497 So.2d at 900 – cannot create an interest in land, either. See Randolph, 727 N.W.2d at 392 (“Because the right of first refusal gives the holder fewer rights than an option, we conclude that if the latter does not create an interest in land, neither does the former.”); Robroy, 622 P.2d at 370 (“The holder of a right of first refusal has far less of an interest in land than the holder of an ordinary option.”).
This conclusion is consistent with our approach in Iglehart, 383 So.2d 610. There, we considered whether a fixed-price right of first refusal for an unlimited duration should be analyzed under the rule against perpetuities or under the rule against unreasonable restraints on alienation. Id. at 613. We concluded that it was more appropriately analyzed under the rule against unreasonable restraints: “Although we conclude that the option in this case might be subject to the rule against perpetuities, such a finding is not necessary to answer the first question since we find this repurchase option is more appropriately classified as an unreasonable restraint on the use of the subject property.” Id. at 614 (emphasis added). We held that the fixed-price repurchase option at issue violated the rule against unreasonable restraints, but recognized that “the law is clear that a repurchase option at market or appraised value for unlimited duration is not an unreasonable restraint.” Id. at 615.
Although in Iglehart we found it unnecessary to address whether a right of first refusal is subject to the rule against perpetuities, our opinion noted our preference for analyzing rights of first refusal under the rule against unreasonable restraints. Id. at 616; see also 6 Am. L. Prop. § 26.66 (arguing that courts should have analyzed options and preemptions under the rule against unreasonable restraints on alienation rather than the rule against perpetuities because “[e]verything of value in the option device could have been preserved, and its evils combated more effectively than can be done through the rule against perpetuities”).
We reaffirm our holding in Iglehart that rights of first refusal should be analyzed under the rule against unreasonable restraints, and close the door left open there by concluding that rights of first refusal are not subject to the common law rule against perpetuities.4 A right of first refusal is a contractual right. The rule against perpetuities, on the other hand, is “a rule of property law, not of contract law.” Iglehart, 383 So.2d at 614; see also Warren, 203 So.2d at 526 (stating that an option does not vest the holder with an interest in the land, but is “strictly a contractual right, not a property right, while the rule against perpetuities is a rule of property rather than a rule of contract”).5
In holding that the rule against perpetuities does not apply to rights of first refusal, we recognize that we are adopting the minority view. It also, however, appears to be the more modern one. See Jesse Dukeminier, A Modern Guide to Perpetuities, 74 Cal. L.Rev. 1867, 1908 (1986) (“The modern trend … has been to free preemptive options from the Rule and to subject them instead to the rule against unreasonable restraints on alienation.”). For example, the First Restatement of Property identified an option as subject to the rule. See Restatement (First) of Property § 413(1) (1944); see also id. cmt. e (“Preemptive provisions, being analogous to options upon a condition precedent, must comply with the rule against perpetuities in so far as their maximum duration is concerned.”). The Third Restatement, however, reversed course, stating that the rule does not apply to options or rights of first refusal. Restatement (Third) of Property: Servitudes, § 3.3 (2000). The historical development is explained:
In the late 19th century … courts began to apply [the rule] to commercial land transactions, including options [and] rights of first refusal…. The virtue of the rule was that it invalidated all interests that lacked a durational limit, thus clearing titles without any need to inquire into the utility of the arrangement. Its vice was that it operated arbitrarily, applying a time period totally unsuited to commercial transactions….
Although commentators had long complained that the rule against perpetuities should not be applied to commercial transactions, it was not until the 1980s that courts in any number followed suit…. While some courts continue to adhere to the old view, there is authority to support using restraints-on-alienation doctrine rather than the rule against perpetuities, which blindly invalidates transactions without regard to merit.
Id. cmt. b (emphasis added). We agree that applying the rule to rights of first refusal does not serve the rule’s purposes, which is “to ensure that property is reasonably available for development by prohibiting restraints that remove property from a beneficial use for an extended period of time.” Iglehart, 383 So.2d at 613. They are better analyzed under the rule prohibiting unreasonable restraints on alienation. See, e.g., Cambridge Co., 700 P.2d at 542 (“Because the preemptive right… poses no threat to … free alienability… we perceive no reason to invalidate the right under the rule against perpetuities.”); Bortolotti, 866 N.E.2d at 889 (“Because the holder of a right of first refusal may only choose to purchase property on the same terms as a bona fide offer…. the rule against perpetuities logically should not apply. In our view, this position is better suited for business transactions, such as the one here, in which the right of first refusal was created.”); Metro. Transp. Auth., 501 N.Y.S.2d 306, 492 N.E.2d at 385 (recognizing that, at least in commercial settings, rights of first refusal are “best regulated by the rule against unreasonable restraints on alienation”).
[Note: We will study the rule against unreasonable restraints on alienation in the context of covenants. This rule, which attempts to protect the free alienability of property, applies to conditions in grants and to covenants, which are promises concerning one’s use of land that do are enforceable as agreements rather than as conditions of continued title.]
- The effective date of the statute was January 1, 1979. Ch. 77-23, § 2, Laws of Fla. The parties executed the Agreement in 1977, so this statute does not apply.
- See, e.g., HSL Linda Gardens Props., Ltd. v. Seymour, 163 Ariz. 396, 788 P.2d 129, 130 (Ct.App.1990); Estate of Johnson v. Carr, 286 Ark. 369, 691 S.W.2d 161, 161 (1985); Strong v. Theis, 187 Cal.App.3d 913, 232 Cal.Rptr. 272, 276 (1986); Neustadt v. Pearce, 145 Conn. 403, 143 A.2d 437, 438 (1958); Stuart Kingston, Inc. v. Robinson, 596 A.2d 1378, 1383 (Del. 1991); Martin v. Prairie Rod & Gun Club, 39 Ill.App.3d 33, 348 N.E.2d 306, 309 (1976); Buck v. Banks, 668 N.E.2d 1259, 1261 (Ind.Ct.App. 1996); Trecker v. Langel, 298 N.W.2d 289, 291 (Iowa 1980); Gore v. Beren, 254 Kan. 418, 867 P.2d 330, 338 (1994); Low v. Spellman, 629 A.2d 57, 58 (Me. 1993); Ferrero Constr. Co. v. Dennis Rourke Corp., 311 Md. 560, 536 A.2d 1137, 1139 (1988); Pace v. Culpepper, 347 So.2d 1313, 1317 (Miss.1977); Nickels v. Cohn, 764 S.W.2d 124, 132 (Mo.Ct.App.1989); Mazzeo v. Kartman, 234 N.J.Super. 223, 560 A.2d 733, 737 (App.Div.1989); Village of Pinehurst v. Reg’l Inv. of Moore, Inc., 330 N.C. 725, 412 S.E.2d 645, 646 (1992); Schafer v. Deszcz, 120 Ohio App.3d 410, 698 N.E.2d 60, 62 (1997); Webb v. Reames, 326 S.C. 444, 485 S.E.2d 384, 385 (Ct.App.1997); Clark v. Shelton, 584 P.2d 875, 877 (Utah 1978); Lake of the Woods Ass’n v. McHugh, 238 Va. 1, 380 S.E.2d 872, 874 (1989); Smith v. VanVoorhis, 170 W.Va. 729, 296 S.E.2d 851, 854 (1982); Browe v. Rasmussen, 121 Wis.2d 697, 359 N.W.2d 181, 1984 WL 180227 (Wis.Ct.App. 1984); see also Hansen v. Stroecker, 699 P.2d 871, 873 (Alaska 1985) (recognizing that under the traditional approach options in gross are subject to the rule, but adopting the “wait-and-see” approach); Byke, 680 P.2d at 195 (finding the rule applicable to an option, but imposing a reasonable timeframe to avoid a violation); Campbell v. Campbell, 313 Ky. 249, 230 S.W.2d 918, 920 (1950) (“The general rule recognized by the great majority of courts is that an option … extending beyond the period limited by the rule against perpetuities, violates such rule….”); Melcher v. Camp, 435 P.2d 107, 115 (Okla.1967) (“[T]he interest sufficient to invoke the … rule against perpetuities is created and transferred in the ordinary option.”); Hall v. Crocker, 192 Tenn. 506, 241 S.W.2d 548, 549 (1951) (recognizing that a fixed price right to repurchase must not violate the rule).
- See, e.g., Robertson v. Murphy, 510 So.2d 180, 182 (Ala. 1987); Cambridge Co. v. East Slope Inv. Corp., 700 P.2d 537, 542 (Colo. 1985); Shiver, 304 S.E.2d at 906; Bortolotti v. Hayden, 449 Mass. 193, 866 N.E.2d 882, 889 (2007); Randolph v. Reisig, 272 Mich.App. 331, 727 N.W.2d 388, 392 (2006); Metro. Transp. Auth. v. Bruken Realty Corp., 67 N.Y.2d 156, 501 N.Y.S.2d 306, 492 N.E.2d 379, 385 (1986); Cherokee Water Co. v. Forderhause, 641 S.W.2d 522, 526 (Tex.1982); Robroy Land Co. v. Prather, 95 Wash.2d 66, 622 P.2d 367, 369 (1980); Hartnett v. Jones, 629 P.2d 1357, 1360 (Wyo.1981); see also Weber v. Texas Co., 83 F.2d 807, 808 (5th Cir.1936) (“The option under consideration is within neither the purpose nor the reason for the rule.”); cf. Great Bay Sch. & Training Ctr. v. Simplex Wire & Cable Co., 131 N.H. 682, 559 A.2d 1329, 1331 (1989)(stating that the rule does not apply to all preemptive rights, just those that “pose a substantial restraint on alienation”); Power Gas Mktg. & Transmission, Inc. v. Cabot Oil & Gas Corp., 2008 Pa. Super 54, 948 A.2d 807 (2008) (holding that a right of first refusal in an oil and gas lease agreement is not subject to the rule against perpetuities; stating “we also question whether, in the first instance, rights of first refusal… ever concern propertied estates such that they should be brought within the rule against perpetuities”).
- Neither party has addressed whether the right of first refusal at issue here is an unreasonable restraint on alienation. We agree with the Fourth District, however, that because it is not for a fixed price, it is not an unreasonable restraint. Old Port Cove, 954 So.2d at 746; see Iglehart, 383 So.2d at 615 (“[T]he law is clear that a repurchase option at market or appraised value for unlimited duration is not an unreasonable restraint.”).
- Because a right of first refusal is a contractual right, not a property interest, we need not consider section 689.225(6)(c), Florida Statutes, which permits reformation of “nonvested property interests” created before October 1, 1988.
Texaco Refining and Marketing, Inc. v. Jack Samowitz et al.,
213 Conn. 676 (1990)
Walter R. Hampton, Jr., with whom were Donald L. Mackie and, on the brief, Lawrence H. Lissitzyn, for the appellants (defendants).
Jerome A. Mayer, with whom was Kim E. Nolan, for the appellee (plaintiff).
This appeal concerns the validity, under General Statutes § 47-33a and the common law rule against perpetuities, of an option to purchase real property contained in a long-term commercial lease. The named plaintiff, Texaco Refining and Marketing, Inc., brought an action for specific performance of an option contract against the defendants, Jack Samowitz, Alex Klein, Sheila Klein, Gloria Walkoff and Marilyn Moss, as successors in interest to the lessor of a lease executed and recorded in 1964. The trial court rendered judgment for the plaintiff, and the defendants have appealed. We transferred their appeal here in accordance with Practice Book § 4023. We find no reversible error.
The trial court relied on a stipulation between the parties for its finding of facts. On June 3, 1964, the named plaintiff and Kay Realty Corporation, the predecessor in interest of the defendants, executed a lease for property in Southington. The term of the leasehold was fifteen years, subject to renewal by the lessee, the plaintiff, for three additional five year periods. The plaintiff exercised two of these options for renewal.
The provision of the lease at issue in this appeal granted the plaintiff “the exclusive right, at lessee’s option, to purchase the demised premises … at any time during the term of this lease or an extension or renewal thereof, from and after the 14th year of the initial term for the sum of $125,000.” On August 14, 1987, during the second renewal period under the lease, the plaintiff gave notification, by certified mail, of its exercise of its option to purchase. When the defendants refused to transfer the property, the plaintiff brought this action, on December 30, 1987, for a judicial order of specific performance.
The trial court found that the plaintiff had demonstrated that it was ready, willing and able to perform its obligations under the contract, and that the option contained in its lease was supported by consideration. Noting that the terms of the lease had originally been negotiated by two corporations bargaining at arm’s length, the court concluded that the option was enforceable. The court expressly considered and rejected both the statutory and the common law defenses that the defendants reassert in this appeal. Although we do not necessarily subscribe to the trial court’s reasoning, we concur in its judgment on alternate grounds. Bernstein v. Nemeyer, 213 Conn. 665, 669, 570 A.2d 164 (1990); Favorite v. Miller, 176 Conn. 310, 317, 407 A.2d 974 (1978).
[The court rejected the the statutory defense to specific performance].
The defendants rely on the common law rule against perpetuities as their second argument for the unenforceability of the plaintiff’s option to purchase their property. The rule against perpetuities states that “[n]o interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.” J. Gray, The Rule Against Perpetuities (4th Ed. 1942) p. 191; Connecticut Bank & Trust Co. v. Brody, 174 Conn. 616, 623, 392 A.2d 445 (1978). The defendants maintain that the option in this case did not vest within the time span mandated by the rule. We disagree.
The trial court determined that the option in the lease agreement did not violate the rule against perpetuities by construing the lease agreement as a series of discrete undertakings, first for an initial fourteen year term, and thereafter for each renewal term. Because the option could be exercised only within one of these discrete terms, none of which exceeded twenty-one years in length, the court held that the interest in the option would necessarily vest within the time period specified by the rule against perpetuities.
Whatever might be the merits of the trial court’s construction of the lease agreement, we prefer to consider a more basic question: do options in long-term leases fall within the jurisdiction of the rule against perpetuities? Our precedents indicate that the rule applies to an unrestricted option to purchase real property; Neustadt v. Pearce, 145 Conn. 403, 405, 143 A.2d 437 (1958); H. J. Lewis Oyster Co. v. West, 93 Conn. 518, 530, 107 A. 138 (1919); but not to an option to renew the term of a real property lease. Lonergan v. Connecticut Food Store, Inc., 168 Conn. 122, 124, 357 A.2d 910 (1975). We have not, however, previously considered the relationship between the rule against perpetuities and an option to purchase contained in a long-term commercial lease of real property.
The defendants have offered no reason of policy why we should extend the ambit of the rule against perpetuities to cover an option to purchase contained in a commercial lease. “The underlying and fundamental purpose of the rule is founded on the public policy in favor of free alienability of property and against restricting its marketability over long periods of time by restraints on its alienation.” Connecticut Bank & Trust Co. v. Brody, supra, 624; 4 Restatement, Property (1944) pp. 2129-33. An option coupled with a long-term commercial lease is consistent with these policy objectives because it stimulates improvement of the property and thus renders it more rather than less marketable. 3 L. Simes & A. Smith, The Law of Future Interests (2d Ed. 1956) p. 162. Any extension of the rule against perpetuities would, furthermore, be inconsistent with the legislative adoption of the “second look” doctrine, pursuant to which an interest subject to the rule may be validated, contrary to the common law, by the occurrence of events subsequent to the ereation of the interest. See General Statutes § 45-95; Connecticut Bank & Trust Co. v. Brody, supra, 627-28.
We therefore conclude that an option to purchase contained in a commercial lease, at least if the option must be exercised within the leasehold term, is valid without regard to the rule against perpetuities. This position is consistent with the weight of authority in the United States. See, e.g., Dozier v. Troy Drive-in-Theatres, 265 Ala. 93, 101-103, 89 So. 2d 537 (1956); Cambridge Co. v. East Slope Investment Corporation, 700 P.2d 537, 540 (Colo. 1985); Wing, Inc. v. Arnold, 107 So. 2d 765, 768-69 (Fla. App. 1959); St Regis Paper Co. v. Brown, 247 Ga. 361, 363-64, 276 S.E.2d 24 (1981); Keogh v. Peck, 316 Ill. 318, 333-35, 147 N.E. 266 (1925); Hollander v. Central Metal Co., 109 Md. 131, 157-61, 71 A. 442 (1908); Quarto Mining Co. v. Litman, 42 Ohio St. 2d 73, 78, 326 N.E.2d 676, cert. denied, 423 U.S. 866, 96 S. Ct. 128, 46 L. Ed. 2d 96 (1975); Producers Oil Co. v. Gore, 610 P.2d 772, 775 (Okla. 1980); Hoover v. Ford’s Prairie Coal Co., 145 Wash. 295, 306, 259 P. 1079 (1927); contra First Huntington National Bank v. Gideon-Broh Realty Co., 139 W. Va. 130, 152-53, 79 S.E.2d 675 (1953). The commentators have, for a long time, unanimously supported what has become the majority view. See, e.g., E. Abbot, “Leases and the Rule against Perpetuities,” 27 Yale L.J. 878, 885-89 (1918); 6 American Law of Property (A. Casner ed. 1952) § 24.57; A. Langeluttig, “Options to Purchase and the Rule against Perpetuities,” 17 Va. L. Rev. 461, 464-71 (1931); 5A R. Powell, Real Property (1989) § 771 ; 4 Restatement, Property (1944) § 395; 3 L. Simes & A. Smith, supra, p. 162; 4A G. Thompson, Real Property (1979) p. 618. The plaintiff’s option in this case was, therefore, enforceable.
2.3. Restraints on Marriage
Shapira v. Union National Bank,
39 Ohio Misc. 28 (Ohio Probate Ct. 1974)
Mr. Dennis Haines, for plaintiff.
Mr. Martin Novak, for defendant State of Israel.
Mr. Irwin I. Kretzer, for defendant Union National Bank.
This is an action for a declaratory judgment and the construction of the will of David Shapira, M. D., who died April 13, 1973, a resident of this county. By agreement of the parties, the case has been submitted upon the pleadings and the exhibit.
The portions of the will in controversy are as follows:
“Item VIII. All the rest, residue and remainder of my estate, real and personal, of every kind and description and wheresoever situated, which I may own or have the right to dispose of at the time of my decease, I give, devise and bequeath to my three (3) beloved children, to wit: Ruth Shapira Aharoni, of Tel Aviv, Israel, or wherever she may reside at the time of my death; to my son Daniel Jacob Shapira, and to my son Mark Benjamin Simon Shapira in equal shares, with the following qualifications: * * *
“(b) My son Daniel Jacob Shapira should receive his share of the bequest only, if he is married at the time of my death to a Jewish girl whose both parents were Jewish. In the event that at the time of my death he is not married to a Jewish girl whose both parents were Jewish, then his share of this bequest should be kept by my executor for a period of not longer than seven (7) years and if my said son Daniel Jacob gets married within the seven year period to a Jewish girl whose both parents were Jewish, my executor is hereby instructed to turn over his share of my bequest to him. In the event, however, that my said son Daniel Jacob is unmarried within the seven (7) years after my death to a Jewish girl whose both parents were Jewish, or if he is married to a non Jewish girl, then his share of my estate, as provided in item 8 above should go to The State of Israel, absolutely.”
The provision for the testator’s other son Mark, is conditioned substantially similarly. Daniel Jacob Shapira, the plaintiff, alleges that the condition upon his inheritance is unconstitutional, contrary to public policy and unenforceable because of its unreasonableness, and that he should be given his bequest free of the restriction. Daniel is 21 years of age, unmarried and a student at Youngstown State University.
The provision in controversy is an executory devise or legacy, under which vesting of the estate of Daniel Jacob Shapira or the State of Israel is not intended to take place necessarily at the death of the testator, but rather conditionally, at a time not later than seven years after the testator’s death. The executory aspect of the provision, though rather unusual, does not render it invalid. Heath v. City of Cleveland (1926), 114 Ohio St. 535.
Plaintiff’s argument that the condition in question violates constitutional safeguards is based upon the premise that the right to marry is protected by the Fourteenth Amendment to the Constitution of the United States… . . The court concludes … that the upholding and enforcement of the provisions of Dr. Shapira’s will conditioning the bequests to his sons upon their marrying Jewish girls does not offend the Constitution of Ohio or of the United States.
The condition that Daniel’s share should be “turned over to him if he should marry a Jewish girl whose both parents were Jewish” constitutes a partial restraint upon marriage. If the condition were that the beneficiary not marry anyone, the restraint would be general or total, and, at least in the case of a first marriage, would be held to be contrary to public policy and void. A partial restraint of marriage which imposes only reasonable restrictions is valid, and not contrary to public policy: 5 Bowe-Parker: Page on Wills 460, Section 44.25; 56 Ohio Jurisprudence 2d 243, Wills, Section 729; 52 American Jurisprudence 2d 1023, Marriage, Section 181. The great weight of authority in the United States is that gifts conditioned upon the beneficiary’s marrying within a particular religious class or faith are reasonable. 5 Bowe-Parker; Page on Wills 461, Section 44.25; 52 American Jurisprudence 2d 1025, Marriage, Section 183. 56 Ohio Jurisprudence 2d 245, Wills, Section 731; 1 Prentice-Hall, Estate Planning, Law of Wills, 373, Paragraph 375.20; 1 Restatement of the Law, Trusts 2d, 166, Section 62 (h); National Bank v. Snodgrass (supra), annotation, 50 A. L. R. 2d 740; Gordon v. Gordon, supra; In re Harris (1955), 143 N. Y. Supp. 2d 746; Matter of Seaman (1916), 218 N. Y. 77, 112 N. E. 576; Matter of Liberman (1939), 279 N. Y. 458, 18 N. E. 2d 658; In re Silverstein’s Will (1956), 155 N. Y. Supp. 2d 598; In re Clayton’s Estate (Phila. Co. Pa. 1930), 13 D. & C. 413; Pacholder v. Rosenheim (1916), 129 Md. 455, 99 A. 672.
Plaintiff contends, however, that in Ohio a condition such as the one in this case is void as against the public policy of this state. In Ohio, as elsewhere, a testator may not attach a condition to a gift which is in violation of public policy. 56 Ohio Jurisprudence 2d 238, Wills, Section 722; Neidler v. Donaldson (P. C. Seneca 1966), 9 Ohio Misc. 208, 224 N. E. 2d 404, 38 O. O. 2d 360. There can be no question about the soundness of plaintiff’s position that the public policy of Ohio favors freedom of religion and that it is guaranteed by Section 7, Article I of the Ohio Constitution, providing that “all men have a natural and indefeasible right to worship Almighty God according to the dictates of their own conscience.” Plaintiff’s position that the free choice of religious practice cannot be circumscribed or controlled by contract is substantiated by Hackett v. Hackett (C. A. Lucas 1958), 78 Ohio Law Abs. 485, 150 N. E. 2d 431. This case held that a covenant in a separation agreement, incorporated in a divorce decree, that the mother would rear a daughter in the Roman Catholic faith was unenforceable. However, the controversial condition in the case at bar is a partial restraint upon marriage and not a covenant to restrain the freedom of religious practice; and, of course, this court is not being asked to hold the plaintiff in contempt for failing to marry a Jewish girl of Jewish parentage.
Counsel contends that if “Dr. David Shapira, during his life, had tried to impose upon his son those restrictions set out in his Will he would have violated the public policy of Ohio as shown in Hackett v. Hackett. The public policy is equally violated by the restrictions Dr. Shapira has placed on his son by his Will.” This would be true, by analogy, if Dr. Shapira, in his lifetime, had tried to force his son to marry a Jewish girl as the condition of a completed gift. But it is not true that if Dr. Shapira had agreed to make his son an inter-vivos gift if he married a Jewish girl within seven years, that his son could have forced him to make the gift free of the condition.
It is noted, furthermore, in this connection, that the courts of Pennsylvania distinguish between testamentary gifts conditioned upon the religious faith of the beneficiary and those conditioned upon marriage to persons of a particular religious faith. In In Re Clayton’s Estate, supra (13 D. & C. 413), the court upheld a gift of a life estate conditioned upon the beneficiary’s not marrying a woman of the Catholic faith. In its opinion the court distinguishes the earlier case of Drace v. Klinedinst (1922), 275 Pa. 266, 118 A. 907, in which a life estate willed to grandchildren, provided they remained faithful to a particular religion, was held to violate the public policy of Pennsylvania. In Clayton’s Estate, the court said that the condition concerning marriage did not affect the faith of the beneficiary, and that the condition, operating only on the choice of a wife, was too remote to be regarded as coercive of religious faith.
But counsel relies upon an Ohio case much more nearly in point, that of Moses v. Zook (C. A., Wayne 1934), 18 Ohio Law Abs. 373. This case involves a will in which the testatrix gave the income of her residual estate in trust to her niece and nephews for two years and then the remainder to them. Item twelve provides as follows: “If any of my nieces or nephews should marry outside of the Protestant Faith, then they shall not receive any part of my estate devised or bequeathed to them.” The will contained no gift over upon violation of the marriage condition. The holding of the trial court was that item twelve was null and void as being against public policy and the seven other items of the will should be administered as specified in detail by the court. There is nothing in the reported opinion to show to what extent, if at all, the question of public policy was in issue or contested in the trial court; only one of the several other unrelated holdings of the trial court (not including the public policy holding) was assigned as error; and although the Court of Appeals adopted the unexcepted-to holdings of the trial court, there is no citation of authorities or discussion concerning the public policy question itself. The case was apparently not appealed to the Supreme Court, and no other cases in Ohio have been cited or found. Moses v. Zook differs in its facts in not containing a gift over upon breach of the condition, and appears not to have been a sufficiently litigated or reasoned establishment of the public policy of Ohio which this court should be obliged to follow.
The only cases cited by plaintiff’s counsel in accord with the holding in Moses v. Zook are some English cases and one American decision. In England the courts have held that partial restrictions upon marriage to persons not of the Jewish faith, or of Jewish parentage, were not contrary to public policy or invalid. Hodgson v. Halford (1879 Eng.) L. R. 11 Ch. Div. 959, 50 A. L. R. 2d 742. Other cases in England, however, have invalidated forfeitures of similarly conditioned provisions for children upon the basis of uncertainty or indefiniteness. Re Blaiberg  Ch. 385,  1 All. Eng. 632, 50 A. L. R. 2d 746; Clayton v. Ramsden , A. C. 320 , 1 All. Eng. 16-H. L., 50 A. L. R. 2d 746; Re Donn , Ch. 8 , 2 All. Eng. 564, 50 A L. R. 2d 746; Re Moss’ Trusts , 1 All. Eng. 207, 61 Times L. 147, 50 A. L. R. 2d 747. Since the foregoing decisions, a later English case has upheld a condition precedent that a granddaughter-beneficiary marry a person of Jewish faith and the child of Jewish parents. The court distinguished the cases cited above as not applicable to a condition precedent under which the legatee must qualify for the gift by marrying as specified, and there was found to be no difficulty with indefiniteness where the legatee married unquestionably outside the Jewish faith. Re Wolffe, 1 Week L. R. 1211  2 All. Eng. 697, 50 A. L. R.2d 747.
The American case cited by plaintiff is that of Maddox v. Maddox (1854), 52 Va. (11 Grattan’s)804. The testator in this case willed a remainder to his nice if she remain a member of the Socity of Friends. When the niece arrived at a marriageable age there were but five or six unmarried men of the society in the neighborhood in which she lived. She married a non-member and thus lost her own membership. The court held the condition to be an unreasonable restraint upon marriage and void, and that there being no gift over upon breach of the condition, the condition was in terrorem, and did not avoid the bequest. It can be seen that while the court considered the testamentary condition to be a restraint upon marriage, it was primarily one in restraint of religious faith. The court said that with the small number of eligible bachelors in the area the condition would have operated as a virtual prohibition of the niece’s marrying, and that she could not be expected to “go abroad” in search of a helpmate or to be subjected to the chance of being sought after by a stranger. The court distinguished the facts of its case from those in England upholding conditions upon marriage by observing that England was “already overstocked with inhabitants” while this country had “an unbounded extent of territory, a large portion of which is yet unsettled, and in which increase of population is one of the main elements of national prosperity.” The other ground upon which the Virginia court rested its decision, that the condition was in terrorem because of the absence of a gift over, is clearly not applicable to the case at bar, even if it were in accord with Ohio law, because of the gift over to the State of Israel contained in the Shapira will.
In arguing for the applicability of the Maddox v. Maddox test of reasonableness to the case at bar, counsel for the plaintiff asserts that the number of eligible Jewish females in this county would be an extremely small minority of the total population especially as compared with the comparatively much greater number in New York, whence have come many of the cases comprising the weight of authority upholding the validity of such clauses. There are no census figures in evidence. While this court could probably take judicial notice of the fact that the Jewish community is a minor, though important segment of our total local population, nevertheless the court is by no means justified in judicial knowledge that there is an insufficient number of eligible young ladies of Jewish parentage in this area from which Daniel would have a reasonable latitude of choice. And of course, Daniel is not at all confined in his choice to residents of this county, which is a very different circumstance in this day of travel by plane and freeway and communication by telephone, from the horse and buggy days of the 1854 Maddox v. Maddox decision. Consequently, the decision does not appear to be an appropriate yardstick of reasonableness under modern living conditions.
Plaintiff’s counsel contends that the Shapira will falls within the principle of Fineman v. Central National Bank (1961), 87 Ohio Law Abs. 236, 175 N.E. 2d 837, 18 O.O. 2d 33, holding that the public policy of Ohio does not countenance a bequest or devise conditioned on the beneficiary’s obtaining a separation or divorce from his wife. Counsel argues that the Shapira condition would encourage the beneficiary to marry a qualified girl just to receive the bequest, and then to divorce her afterward. This possibility seems too remote to be a pertinent application of the policy against bequests conditioned upon divorce. Most other authorities agree with Fineman v. Bank that as a general proposition, a testamentary gift effective only on condition that the recipient divorce or separate from his or her spouse is against public policy and invalid. 14 A. L. R. 3d 1222. But no authorities have been found extending the principle to support plaintiff’s position. Indeed, in measuring the reasonableness of the condition in queston, both the father and the court should be able to assume that the son’s motive would be proper. And surely the son should not gain the advantage of the avoidance of the condition by the possibility of his own impropriety.
Finally, counsel urges that the Shapira condition tends to pressure Daniel, by the reward of money, to marry within seven years without opportunity for mature reflection, and jeopardizes his college education. It seems to the court, on the contrary, that the seven year time limit would be a most reasonable grace period, and one which would give the son ample opportunity for exhaustive reflection and fulfillment of the condition without constraint or oppression. Daniel is no more being “blackmailed into a marriage by immediate financial gain,” as suggested by counsel, than would be the beneficiary of a living gift or conveyance upon consideration of a future marriage – an arrangement which has long been sanctioned by the courts of this state. Thompson v. Thompson (1867), 17 Ohio St. 649.
In the opinion of this court, the provision made by the testator for the benefit of the State of Israel upon breach or failure of the condition is most significant for two reasons. First, it distinguishes this case from the bare forfeitures in Moses v. Zook, and in Maddox v. Maddox (including the technical in terrorem objection), and, in a way, from the vagueness and indefiniteness doctrine of some of the English cases. Second, and of greater importance, it demonstrates the depth of the testator’s conviction. His purpose was not merely a negative one designed to punish his son for not carrying out his wishes. His unmistakable testamentary plan was that his possessions be used to encourage the preservation of the Jewish faith and blood, hopefully through his sons, but, if not, then through the State of Israel. Whether this judgment was wise is not for this court to determine. But it is the duty of this court to honor the testator’s intention within the limitations of law and of public policy. The prerogative granted to a testator by the laws of this state to dispose of his estate according to his conscience is entitled to as much judicial protection and enforcement as the prerogative of a beneficiary to receive an inheritance.
It is the conclusion of this court that public policy should not, and does not preclude the fulfillment of Dr. Shapira’s purpose, and that in accordance with the weight of authority in this country, the conditions contained in his will are reasonable restrictions upon marriage, and valid.
Moore v. Phillips,
627 P.2d 831 (Kan. Ct. App. 1981).
Morgan Wright, Larned, for appellant.
Richard L. Friedeman, of Conner & Opie, Great Bend, for appellees.
Before Prager, Justice Presiding, Abbott, J., and J. Patrick Brazil, District Judge, Assigned.
Prager, Justice Presiding:
This is a claim for waste asserted against the estate of a life tenant by remaindermen, seeking to recover damages for the deterioration of a farmhouse resulting from neglect by the life tenant. The life tenant was Ada C. Brannan. The defendant-appellant is her executrix, Ruby F. Phillips. The claimants-appellees are Dorothy Moore and Kent Reinhardt, the daughter and grandson of Ada C. Brannan.
The facts in the case are essentially as follows: Leslie Brannan died in 1962. By his will, he left his wife, Ada C. Brannan, a life estate in certain farmland containing a farmhouse, with remainder interests to Dorothy Moore and Kent Reinhardt. Ada C. Brannan resided in the farmhouse until 1964. She then rented the farmhouse until August 1, 1965, when it became unoccupied. From that point on, Ada C. Brannan rented all of the farmland but nobody lived in the house. It appears that from 1969 to 1971 it was leased to the remaindermen, but they did not live there. It is undisputed that the remaindermen inspected the premises from time to time down through the years. In 1973, Ada C. Brannan petitioned for a voluntary conservatorship because of physical infirmities. In 1976, Ada C. Brannan died testate, leaving her property to others. Dorothy Moore and Kent Reinhardt were not included in Ada’s bounty. From the record, it is clear that Ada C. Brannan and her daughter, Dorothy Moore, were estranged from about 1964 on. This estrangement continued until Ada Brannan’s death, although there was minimal contact between them from time to time.
After Ada Brannan’s death, Dorothy Moore and Kent Reinhardt filed a demand against the estate of Ada Brannan on the theory of waste to recover damages for the deterioration of the farmhouse. The total damages alleged were in the amount of $16,159. Both the district magistrate and the district judge inspected the premises and found deterioration due to neglect by the life tenant. The district court found the actual damages to the house to be $10,433. The executrix of Ada’s estate denied any neglect or breach of duty by Ada Brannan as life tenant. She asserted the defenses of laches or estoppel, the statute of limitation, and abandonment. These affirmative defenses were rejected by the district magistrate and the district judge, except the defense of laches or estoppel which the district magistrate sustained. On appeal, the district judge found that the defense of laches or estoppel was not applicable against the remaindermen in this case. Following entry of judgment in favor of the remaindermen, the executrix appealed.
It is important to note that the executrix does not contend, as points of error, that the life tenant was not responsible for deterioration of the farmhouse or that the action is barred by a statute of limitations. The amount of damages awarded is not contested. In her brief, the executrix-appellant asserts four points which essentially present a single issue: Whether the remaindermen, by waiting eleven years until the death of the life tenant before filing any claim or demand against the life tenant for neglect of the farmhouse, are barred by laches or estoppel?
The executrix contends, in substance, that laches and estoppel, although considered to be equitable defenses, are available in an action at law to recover damages. She points out that, under K.S.A. 58-2523, a remainderman may sue to prevent waste during the life of the tenant while the life tenancy is still in existence. She then notes that the remaindermen inspected the premises on numerous occasions during the eleven years the property was vacant; yet they made no demand that the farmhouse be kept in repair. They waited until the death of the life tenant to bring the action, because then they would not be faced with Ada’s testimony which might defeat their claim.
The remaindermen, in their brief, dispute certain factual statements made by the executrix. They agree that the remaindermen had very limited contact with the life tenant after the estrangement. They contend that there is evidence to show the vast majority of the damage to the house occurred during the last two or three years of the life tenancy and that Dorothy Moore did, in fact, express concern to her mother about the deterioration of the house 15 to 20 times during the eleven-year period. They contend that mere passage of time does not constitute laches and that, in order to have laches or estoppel, the person claiming the same must show a detrimental change of position or prejudice of some kind. They argue that the executrix has failed to show any prejudice, since the fact of waste and deterioration is clear and undisputed and there is nothing the testimony of the life tenant could have added on that issue had she been at the trial. As to the failure of the remaindermen to file an action in the lifetime of the life tenant, the remaindermen argue that claimants had been advised to avoid contact with Ada Brannan unless it was absolutely necessary and that they did not want to make a claim during her lifetime since it would have only made a bad situation worse. They maintain that they had good reasons to wait until Ada’s death to assert the claim.
In order to place this case in proper perspective, it would be helpful to summarize some of the basic principles of law applicable where a remainderman asserts a claim of waste against a life tenant. They are as follows:
(1) A life tenant is considered in law to be a trustee or quasi-trustee and occupies a fiduciary relation to the remaindermen. The life tenant is a trustee in the sense that he cannot injure or dispose of the property to the injury of the rights of the remaindermen, but he differs from a pure trustee in that he may use the property for his exclusive benefit and take all the income and profits. Windscheffel v. Wright, 187 Kan. 678, 686, 360 P.2d 178 (1961); In re Estate of Miller, 225 Kan. 655, 594 P.2d 167 (1979).
(2) It is the duty of a life tenant to keep the property subject to the life estate in repair so as to preserve the property and to prevent decay or waste. 51 Am.Jur.2d, Life Tenants and Remaindermen s 259, pp. 546-548. Stated in another way, the law imposes upon a tenant the obligation to return the premises to the landlord or remaindermen at the end of the term unimpaired by the negligence of the tenant. Salina Coca-Cola Bottling Corp. v. Rogers, 171 Kan. 688, 237 P.2d 218 (1951); In re Estate of Morse, 192 Kan. 691, 391 P.2d 117 (1964).
(3) The term “waste” implies neglect or misconduct resulting in material damages to or loss of property, but does not include ordinary depreciation of property due to age and normal use over a comparatively short period of time. First Federal Savings & Loan Ass’n v. Moulds, 202 Kan. 557, 451 P.2d 215 (1969).
(4) Waste may be either voluntary or permissive. Voluntary waste, sometimes spoken of as commissive waste, consists of the commission of some deliberate or voluntary destructive act. Permissive waste is the failure of the tenant to exercise the ordinary care of a prudent man for the preservation and protection of the estate.78 Am.Jur.2d, Waste s 3, p. 397.
(5) The owner of a reversion or remainder in fee has a number of remedies available to him against a life tenant who commits waste. He may recover compensatory damages for the injuries sustained. He may have injunctive relief in equity, or, in a proper case, may obtain a receivership. The same basic remedies are available against either a tenant for years or a life tenant. Kimberlin v. Hicks, 150 Kan. 449, 456, 94 P.2d 335 (1939).
(6) By statute in Kansas, K.S.A. 58-2523, “(a) person seized of an estate in remainder or reversion may maintain an action for waste or trespass for injury to the inheritance, notwithstanding an intervening estate for life or years.”Thus a remainderman does not have to wait until the life tenant dies in order to bring an appropriate action for waste.
(7) Where the right of action of the remainderman or landlord is based upon permissive waste, it is generally held that the injury is continuing in nature and that the statute of limitations does not commence to run in favor of the tenant until the expiration of the tenancy. Under certain state statutes, it has been held that the period of limitation commences at the time the waste is committed. Prescott, Exor. of Mary E. Prescott v. Grimes, 143 Ky. 191, 136 S.W. 206 (1911); In Re Stout’s Estate, 151 Or. 411, 50 P.2d 768 (1935).
(8) There is authority which holds that an action for waste may be lost by laches. Harcourt v. White, 28 Beavan’s 303, 54 Eng.Reprint 382 (1860); 78 Am.Jur.2d, Waste s 38, p. 424. Likewise, estoppel may be asserted as a defense in an action for waste. The doctrine of laches and estoppel are closely related, especially where there is complaint of delay which has placed another at a disadvantage. Laches is sometimes spoken of as a species of estoppel. Laches is a wholly negative thing, the result of a failure to act; estoppel on the other hand may involve an affirmative act on the part of some party of the lawsuit. The mere passage of time is not enough to invoke the doctrine of laches. Each case must be governed by its own facts, and what might be considered a lapse of sufficient time to defeat an action in one case might be insufficient in another. Laches, in legal significance, is not mere delay, but delay that works a disadvantage to another. Clark v. Chipman, 212 Kan. 259, 510 P.2d 1257 (1973). The defense of laches may be applied in actions at law as well as in equitable proceedings. McDaniel v. Messerschmidt, 191 Kan. 461, 464, 382 P.2d 304 (1963). In Osincup v. Henthorn, 89 Kan. 58, 130 P. 652 (1913), it was held that laches is an equitable defense and will not bar a recovery from mere lapse of time nor where there is a reasonable excuse for nonaction of a party in making inquiry as to his rights or in asserting them.
The basic question for our determination is whether the district court erred in holding that the defense of laches or estoppel should not be applied in this case. We have concluded that the district court did not commit error in its rejection of the defense of laches or estoppel under the circumstances of this case. In reaching this conclusion, we have noted the following factors: The evidence is clear that the life tenant, Ada Brannan, failed to carry out her duty as life tenant and quasi-trustee to keep the property in reasonable repair. The claim of waste does not arise out of any act on the part of the remaindermen. Preservation of the property was the responsibility of the life tenant. There was evidence to show that the vast majority of the damage to the farmhouse occurred during the last two or three years of the life tenancy. The fact that permissive waste occurred was proved beyond question. If the life tenant had been alive, she could not very well have disputed the fact that the property has been allowed to deteriorate. Hence, any delay in filing the action until after Ada’s death could not have resulted in prejudice to her executrix. There is no evidence in the record to support the defense of estoppel.
Furthermore, the evidence was undisputed that the life tenant was an elderly woman who died in August of 1976 at the age of 83. The position of Dorothy Moore was that she did not wish to file an action which would aggravate her mother and take funds which her mother might need during her lifetime. Even though Dorothy Moore was estranged from her mother, the law should not require her to sue her mother during her lifetime under these circumstances. As noted above, it was the tenant’s obligation to see that the premises were turned over to the remaindermen in good repair at the termination of the life estate. Under all the circumstances in this case, we hold that the district court did not err in rejecting the defense of laches or estoppel.
The judgment of the district court is affirmed.
Melms v. Pabst Brewing Co.,
104 Wis. 7 (1899)
Bloodgood, Kemper & Bloodgood, for appellants.
Winkler, Flanders, Smith, Bottum & Vilas, for respondent.
This is an action for waste, brought by reversioners against the defendant, which is the owner of an estate for the life of another in a quarter of an acre of land in the city of Milwaukee. The waste claimed is the destruction of a dwelling house upon the land, and the grading of the same down to the level of the street. The complaint demands double damages, under section 3176, Rev. St. 1898.
The quarter of an acre of land in question is situated upon Virginia street, in the city of Milwaukee, and was the homestead of one Charles T. Melms, deceased. The house thereon was a large brick building, built by Melms in the year 1864, and cost more than $20,000. At the time of the building of the house, Melms owned the adjoining real estate, and also owned a brewery upon a part of the premises. Charles T. Melms died in the year 1869, leaving his estate involved in financial difficulties. After his decease, both the brewery and the homestead were sold and conveyed to the Pabst Brewing Company, but it was held in the action of Melms v. Brewing Co., 93 Wis. 140, 66 N. W. 244, that the brewing company only acquired Mrs. Melms’ life estate in the homestead, and that the plaintiffs in this action were the owners of the fee, subject to such life estate. As to the brewery property, it was held in an action under the same title, decided at the same time, and reported in 93 Wis. 153, 66 N. W. 518, that the brewing company acquired the full title in fee.
The homestead consists of a piece of land 90 feet square, in the center of which the aforesaid dwelling house stood; and this parcel is connected with Virginia street on the south by a strip 45 feet wide and 60 feet long, making an exact quarter of an acre. It clearly appears by the evidence that after the purchase of this land by the brewing company the general character of real estate upon Virginia street about the homestead rapidly changed, so that soon after the year 1890 it became wholly undesirable and unprofitable as residence property. Factories and railway tracks increased in the vicinity, and the balance of the property was built up with brewing buildings, until the quarter of an acre homestead in question became an isolated lot and building, standing from 20 to 30 feet above the level of the street, the balance of the property having been graded down in order to fit it for business purposes.
The evidence shows without material dispute that, owing to these circumstances, the residence, which was at one time a handsome and desirable one, became of no practical value, and would not rent for enough to pay taxes and insurance thereon; whereas, if the property were cut down to the level of the street, so that it was capable of being used as business property, it would again be useful, and its value would be largely enhanced. Under these circumstances, and prior to the judgment in the former action, the defendant removed the building, and graded down the property to about the level of the street, and these are the acts which it is claimed constitute waste.
The action was tried before the court without a jury, and the court found, in addition to the facts above stated, that the removal of the building and grading down of the earth was done by the defendant in 1891 and 1892, believing itself to be the owner in fee simple of the property, and that by said acts the estate of the plaintiffs in the property was substantially increased, and that the plaintiffs have been in no way injured thereby. Upon these findings the complaint was dismissed, and the plaintiffs appeal.
Our statutes recognize waste, and provide a remedy by action, and the recovery of double damages therefor (Rev. St. 1898, § 3170 et seq.); but they do not define it. It may be either voluntary or permissive, and may be of houses, gardens, orchards, lands, or woods (Id. § 3171); but, in order to ascertain whether a given act constitutes waste or not, recourse must be had to the common law as expounded by the text-books and decisions.
In the present case a large dwelling house, expensive when constructed, has been destroyed, and the ground has been graded down, by the owner of the life estate, in order to make the property serve business purposes. That these acts would constitute waste under ordinary circumstances cannot be doubted. It is not necessary to delve deeply into the Year Books, or philosophize extensively as to the meaning of early judicial utterances, in order to arrive at this conclusion. The following definition of “waste” was approved by this court in Bandlow v. Thieme, 53 Wis. 57, 9 N. W. 920:
It may be defined to be any act or omission of duty by a tenant of land which does a lasting injury to the freehold, tends to the permanent loss of the owner of the fee, or to destroy or lessen the value of the inheritance, or to destroy the identity of the property, or impair the evidence of title.”In the same case it was also said: “The damage being to the inheritance, and the heir of the reversioner having the right of action to recover it, imply that the injury must be of a lasting and permanent character.
And in Brock v. Dole, 66 Wis. 142, 28 N. W. 334, it was also said that
any material change in the nature and character of the buildings made by the tenant is waste, although the value of the property should be enhanced by the alteration.
These recent judicial utterances in this court settle the general rules which govern waste without difficulty, and it may be said, also, that these rules are in accord with the general current of the authorities elsewhere. But, while they are correct as general expressions of the law upon the subject, and were properly applicable to the cases under consideration, it must be remembered that they are general rules only, and, like most general propositions, are not to be accepted without limitation or reserve under any and all circumstances.
Thus the ancient English rule which prevented the tenant from converting a meadow into arable land was early softened down, and the doctrine of meliorating waste was adopted, which, without changing the legal definition of waste, still allowed the tenant to change the course of husbandry upon the estate if such change be for the betterment of the estate. Bewes, Waste, p. 134, and cases cited. Again, and in accordance with this same principle, the rule that any change in a building upon the premises constitutes waste has been greatly modified, even in England; and it is now well settled that, while such change may constitute technical waste, still it will not be enjoined in equity when it clearly appears that the change will be, in effect, a meliorating change, which rather improves the inheritance than injures it. Doherty v. Allman, 3 App. Cas. 709; In re McIntosh, 61 Law J. Q. B. 164.
Following the same general line of reasoning, it was early held in the United States that, while the English doctrine as to waste was a part of our common law, still that the cutting of timber in order to clear up wild land and fit it for cultivation, if consonant with the rules of good husbandry, was not waste, although such acts would clearly have been waste in England. Tied. Real Prop. (Eng. Ed.) § 74; Rice, Mod. Law Real Prop. §§ 160, 161; Wilkinson v. Wilkinson, 59 Wis. 557, 18 N. W. 527.
These familiar examples of departure from ancient rules will serve to show that, while definitions have remained much the same, the law upon the subject of waste is not an unchanging and unchangeable code, which was crystallized for all time in the days of feudal tenures, but that it is subject to such reasonable modifications as may be demanded by the growth of civilization and varying conditions. And so it is now laid down that the same act may be waste in one part of the country while in another it is a legitimate use of the land, and that the usages and customs of each community enter largely into the settlement of the question. Tied. Real Prop. (Eng. Ed.) § 73.
This is entirely consistent with, and in fact springs from, the central idea upon which the disability of waste is now, and always has been, founded, namely, the preservation of the property for the benefit of the owner of the future estate without permanent injury to it. This element will be found in all the definitions of waste, namely, that it must be an act resulting in permanent injury to the inheritance or future estate. It has been frequently said that this injury may consist either in diminishing the value of the inheritance, or increasing its burdens, or in destroying the identity of the property, or impairing the evidence of title.
The last element of injury so enumerated, while a cogent and persuasive one in former times, has lost most, if not all, of its force, at the present time. It was important when titles were not registered, and descriptions of land were frequently dependent upon natural monuments, or the uses to which the land was put; but since the universal adoption of accurate surveys, and the establishment of the system of recording conveyances, there can be few acts which will impair any evidence of title. Doherty v. Allman, supra; Bewes, Waste, pp. 129, 130, et seq. But the principle that the reversioner or remainder-man is ordinarily entitled to receive the identical estate, or, in other words, that the identity of the property is not to be destroyed, still remains, and it has been said that changes in the nature of buildings, though enhancing the value of the property, will constitute waste if they change the identity of the estate. Brock v. Dole, supra.
This principle was enforced in the last-named case, where it was held that a tenant from year to year of a room in a frame building would be enjoined from constructing a chimney in the building against the objection of his landlord. The importance of this rule to the landlord or owner of the future estate cannot be denied. Especially is it valuable and essential to the protection of a landlord who rents his premises for a short time. He has fitted his premises for certain uses. He leases them for such uses, and he is entitled to receive them back at the end of the term still fitted for those uses; and he may well say that he does not choose to have a different property returned to him from that which he leased, even if, upon the taking of testimony, it might be found of greater value by reason of the change.
Many cases will be found sustaining this rule; and that it is a wholesome rule of law, operating to prevent lawless acts on the part of tenants, cannot be doubted, nor is it intended to depart therefrom in this decision. The case now before us, however, bears little likeness to such a case, and contains elements so radically different from those present in Brock v. Dole that we cannot regard that case as controlling this one.
There are no contract relations in the present case. The defendants are the grantees of a life estate, and their rights may continue for a number of years. The evidence shows that the property became valueless for the purpose of residence property as the result of the growth and development of a great city. Business and manufacturing interests advanced and surrounded the once elegant mansion, until it stood isolated and alone, standing upon just enough ground to support it, and surrounded by factories and railway tracks, absolutely undesirable as a residence, and incapable of any use as business property. Here was a complete change of conditions, not produced by the tenant, but resulting from causes which none could control. Can it be reasonably or logically said that this entire change of condition is to be completely ignored, and the ironclad rule applied that the tenant can make no change in the uses of the property because he will destroy its identity? Must the tenant stand by, and preserve the useless dwelling house, so that he may at some future time turn it over to the reversioner, equally useless?
Certainly, all the analogies are to the contrary. As we have before seen, the cutting of timber, which in England was considered waste, has become in this country an act which may be waste or not, according to the surrounding conditions and the rules of good husbandry; and the same rule applies to the change of a meadow to arable land. The changes of conditions which justify these departures from early inflexible rules are no more marked nor complete than is the change of conditions which destroys the value of residence property as such, and renders it only useful for business purposes.
Suppose the house in question had been so situated that it could have been remodeled into business property; would any court of equity have enjoined such remodeling under the circumstances here shown, or ought any court to render a judgment for damages for such an act? Clearly, we think not. Again, suppose an orchard to have become permanently unproductive through disease or death of the trees, and the land to have become far more valuable, by reason of new conditions, as a vegetable garden or wheat field, is the life tenant to be compelled to preserve or renew the useless orchard, and forego the advantages to be derived from a different use? Or suppose a farm to have become absolutely unprofitable by reason of change of market conditions as a grain farm, but very valuable as a tobacco plantation, would it be waste for the life tenant to change the use accordingly, and remodel a now useless barn or granary into a tobacco shed? All these questions naturally suggest their own answer, and it is certainly difficult to see why, if change of conditions is so potent in the case of timber, orchards, or kind of crops, it should be of no effect in the case of buildings similarly affected.
It is certainly true that a case involving so complete a change of situation as regards buildings has been rarely, if ever, presented to the courts, yet we are not without authorities approaching very nearly to the case before us. Thus, in the case of Doherty v. Allman, before cited, a court of equity refused an injunction preventing a tenant for a long term from changing storehouses into dwelling houses, on the ground that by change of conditions the demand for storehouses had ceased, and the property had become worthless, whereas it might be productive when fitted for dwelling houses.
Again, in the case of Sherrill v. Connor, 107 N. C. 630, 12 S. E. 588, which was an action for permissive waste against a tenant in dower, who had permitted large barns and outbuildings upon a plantation to fall into decay, it was held that, as these buildings had been built before the Civil War to accommodate the operation of the plantation by slaves, it was not necessarily waste to tear them down, or allow them to remain unrepaired, after the war, when the conditions had completely changed by reason of the emancipation, and the changed methods of use resulting therefrom; and that it became a question for the jury whether a prudent owner of the fee, if in possession, would have suffered the unsuitable barns and buildings to have fallen into decay, rather than incur the cost of repair.
This last case is very persuasive and well reasoned, and it well states the principle which we think is equally applicable to the case before us. In the absence of any contract, express or implied, to use the property for a specified purpose, or to return it in the same condition in which it was received, a radical and permanent change of surrounding conditions, such as is presented in the case before us, must always be an important, and sometimes a controlling, consideration upon the question whether a physical change in the use of the buildings constitutes waste. In the present case this consideration was regarded by the trial court as controlling, and we are satisfied that this is the right view.
This case is not to be construed as justifying a tenant in making substantial changes in the leasehold property, or the buildings thereon, to suit his own whim or convenience, because, perchance, he may be able to show that the change is in some degree beneficial. Under all ordinary circumstances the landlord or reversioner, even in the absence of any contract, is entitled to receive the property at the close of the tenancy substantially in the condition in which it was when the tenant received it; but when, as here, there has occurred a complete and permanent change of surrounding conditions, which has deprived the property of its value and usefulness as previously used, the question whether a life tenant, not bound by contract to restore the property in the same condition in which he received it, has been guilty of waste in making changes necessary to make the property useful, is a question of fact for the jury under proper instructions, or for the court, where, as in the present case, the question is tried by the court.
Baker v. Weedon,
262 So.2d 641 (Miss. 1972)
Smith, Downs, Coleman & Ross, Corinth, for appellant.
Sharp & Fisher, Corinth, for appellee.
This is an appeal from a decree of the Chancery Court of Alcorn County. It directs a sale of land affected by a life estate and future interests with provision for the investment of the proceeds. The interest therefrom is to be paid to the life tenant for her maintenance. We reverse and remand.
John Harrison Weedon was born in High Point, North Carolina. He lived throughout the South and was married twice prior to establishing his final residence in Alcorn County. His first marriage to Lula Edwards resulted in two siblings, Mrs. Florence Weedon Baker and Mrs. Delette Weedon Jones. Mrs. Baker was the mother of three children, Henry Baker, Sarah Baker Lyman and Louise Virginia Baker Heck, the appellants herein. Mrs. Delette Weedon Jones adopted a daughter, Dorothy Jean Jones, who has not been heard from for a number of years and whose whereabouts are presently unknown.
John Weedon was next married to Ella Howell and to this union there was born one child, Rachel. Both Ella and Rachel are now deceased.
Subsequent to these marriages John Weedon bought Oakland Farm in 1905 and engaged himself in its operation. In 1915 John, who was then 55 years of age, married Anna Plaxico, 17 years of age. This marriage, though resulting in no children, was a compatible relationship. John and Anna worked side by side in farming this 152.95-acre tract of land in Alcorn County. There can be no doubt that Anna’s contribution to the development and existence of Oakland Farm was significant. The record discloses that during the monetarily difficult years following World War I she hoed, picked cotton and milked an average of fifteen cows per day to protect the farm from financial ruin.
While the relationship of John and Anna was close and amiable, that between John and his daughters of his first marriage was distant and strained. He had no contact with Florence, who was reared by Mr. Weedon’s sister in North Carolina, during the seventeen years preceding his death. An even more unfortunate relationship existed between John and his second daughter, Delette Weedon Jones. She is portrayed by the record as being a nomadic person who only contacted her father for money, threatening on several occasions to bring suit against him.
With an obvious intent to exclude his daughters and provide for his wife Anna, John executed his last will and testament in 1925. It provided in part:
Second; I give and bequeath to may beloved wife, Anna Plaxco Weedon all of my property both real, personal and mixed during her natural life and upon her death to her children, if she has any, and in the event she dies without issue then at the death of my wife Anna Plaxco Weedon I give, bequeath and devise all of my property to my grandchildren, each grandchild sharing equally with the other.
Third; In this will I have not provided for my daughters, Mrs. Florence Baker and Mrs. Delett Weedon Jones, the reason is, I have given them their share of my property and they have not looked after and cared for me in the latter part of my life.
Subsequent to John Weedon’s death in 1932 and the probate of his will, Anna continued to live on Oakland Farm. In 1933 Anna, who had been urged by John to remarry in the event of his death, wed J. E. Myers. This union lasted some twenty years and produced no offspring which might terminate the contingent remainder vested in Weedon’s grandchildren by the will.
There was no contact between Anna and John Weedon’s children or grandchildren from 1932 until 1964. Anna ceased to operate the farm in 1955 due to her age and it has been rented since that time. Anna’s only income is $1000 annually from the farm rental, $300 per year from sign rental and $50 per month by way of social security payments. Without contradiction Anna’s income is presently insufficient and places a severe burden upon her ability to live comfortably in view of her age and the infirmities therefrom.
In 1964 the growth of the city of Corinth was approaching Oakland Farm. A right-of-way through the property was sought by the Mississippi State Highway Department for the construction of U.S. Highway 45 bypass. The highway department located Florence Baker’s three children, the contingent remaindermen by the will of John Weedon, to negotiate with them for the purchase of the right-of-way. Dorothy Jean Jones, the adopted daughter of Delette Weedon Jones, was not located and due to the long passage of years, is presumably dead. A decree pro confesso was entered against her.
Until the notice afforded by the highway department the grandchildren were unaware of their possible inheritance. Henry Baker, a native of New Jersey, journeyed to Mississippi to supervise their interests. He appears, as was true of the other grandchildren, to have been totally sympathetic to the conditions surrounding Anna’s existence as a life tenant. A settlement of $20,000 was completed for the right-of-way bypass of which Anna received $7500 with which to construct a new home. It is significant that all legal and administrative fees were deducted from the shares of the three grandchildren and not taxed to the life tenant. A contract was executed in 1970 for the sale of soil from the property for $2500. Anna received $1000 of this sum which went toward completion of payments for the home.
There was substantial evidence introduced to indicate the value of the property is appreciating significantly with the nearing completion of U.S. Highway 45 bypass plus the growth of the city of Corinth. While the commercial value of the property is appreciating, it is notable that the rental value for agricultural purposes is not. It is apparent that the land can bring no more for agricultural rental purposes than the $100 per year now received.
The value of the property for commercial purposes at the time of trial was $168,500. Its estimated value within the ensuing four years is placed at $336,000, reflecting the great influence of the interstate construction upon the land. Mr. Baker, for himself and other remaindermen, appears to have made numerous honest and sincere efforts to sell the property at a favorable price. However, his endeavors have been hindered by the slowness of the construction of the bypass.
Anna, the life tenant and appellee here, is 73 years of age and although now living in a new home, has brought this suit due to her economic distress. She prays that the property, less the house site, be sold by a commissioner and that the proceeds be invested to provide her with an adequate income resulting from interest on the trust investment. She prays also that the sale and investment management be under the direction of the chancery court.
The chancellor granted the relief prayed by Anna under the theory of economic waste. His opinion reflects:
… (T)he change of the economy in this area, the change in farming conditions, the equipment required for farming, and the age of this complainant leaves the real estate where it is to all intents and purposes unproductive when viewed in light of its capacity and that a continuing use under the present conditions would result in economic waste.
The contingent remaindermen by the will, appellants here, were granted an interlocutory appeal to settle the issue of the propriety of the chancellor’s decree in divesting the contingency title of the remaindermen by ordering a sale of the property.
The weight of authority reflects a tendency to afford a court of equity the power to order the sale of land in which there are future interests. Simes, Law of Future Interest, section 53 (2d ed. 1966), states:
By the weight of authority, it is held that a court of equity has the power to order a judicial sale of land affected with a future interest and an investment of the proceeds, where this is necessary for the preservation of all interests in the land. When the power is exercised, the proceeds of the sale are held in a judicially created trust. The beneficiaries of the trust are the persons who held interests in the land, and the beneficial interests are of the same character as the legal interests which they formally held in the land.
See also Simes and Smith, The Law of Future Interest, § 1941 (2d ed. 1956).
This Court has long recognized that chancery courts do have jurisdiction to order the sale of land for the prevention of waste. Kelly v. Neville, 136 Miss. 429 (1924). In Riley v. Norfleet, 167 Miss. 420, 436-437 (1933), Justice Cook, speaking for the Court and citing Kelly, supra, stated:
… The power of a court of equity on a plenary bill, with adversary interest properly represented, to sell contingent remainders in land, under some circumstances, though the contingent remaindermen are not then ascertained or in being, as, for instance, to preserve the estate from complete or partial destruction, is well established.
While Mississippi and most jurisdictions recognize the inherent power of a court of equity to direct a judicial sale of land which is subject to a future interest, nevertheless the scope of this power has not been clearly defined. It is difficult to determine the facts and circumstances which will merit such a sale.
It is apparent that there must be “necessity” before the chancery court can order a judicial sale. It is also beyond cavil that the power should be exercised with caution and only when the need is evident. Lambdin v. Lambdin, 209 Miss. 672 (1950). These cases, Kelly, Riley and Lambdin, supra, are all illustrative of situations where the freehold estate was deteriorating and the income therefrom was insufficient to pay taxes and maintain the property. In each of these this Court approved a judicial sale to preserve and maintain the estate. The appellants argue, therefore, that since Oakland Farm is not deteriorating and since there is sufficient income from rental to pay taxes, a judicial sale by direction of the court was not proper.
The unusual circumstances of this case persuade us to the contrary. We are of the opinion that deterioration and waste of the property is not the exclusive and ultimate test to be used in determining whether a sale of land affected by future interest is proper, but also that consideration should be given to the question of whether a sale is necessary for the best interest of all the parties, that is, the life tenant and the contingent remaindermen. This “necessary for the best interest of all parties” rule is gleaned from Rogers, Removal of Future Interest Encumbrances-Sale of the Fee Simple Estate, 17 Vanderbilt L. Rev. 1437 (1964); Simes, Law of Future Interest, supra; Simes and Smith, The Law of Future Interest, § 1941 (1956); and appears to have the necessary flexibility to meet the requirements of unusual and unique situations which demand in justice an equitable solution.
Our decision to reverse the chancellor and remand the case for his further consideration is couched in our belief that the best interest of all the parties would not be served by a judicial sale of the entirety of the property at this time. While true that such a sale would provide immediate relief to the life tenant who is worthy of this aid in equity, admitted by the remaindermen, it would nevertheless under the circumstances before us cause great financial loss to the remaindermen.
We therefore reverse and remand this cause to the chancery court, which shall have continuing jurisdiction thereof, for determination upon motion of the life tenant, if she so desires, for relief by way of sale of a part of the burdened land sufficient to provide for her reasonable needs from interest derived from the investment of the proceeds. The sale, however, is to be made only in the event the parties cannot unite to hypothecate the land for sufficient funds for the life tenant’s reasonable needs. By affording the options above we do not mean to suggest that other remedies suitable to the parties which will provide economic relief to the aging life tenant are not open to them if approved by the chancellor. It is our opinion, shared by the chancellor and acknowledged by the appellants, that the facts suggest an equitable remedy. However, it is our further opinion that this equity does not warrant the remedy of sale of all of the property since this would unjustly impinge upon the vested rights of the remaindermen.
Reversed and remanded.
Rodgers, P.J., and Jones, Inzer, and Robertson, JJ., concur.